CBN unfolds procedures for disbursement of N75bn Youth Initiative Fund
Aderemi Ojekunle is a Businessamlive Reporter.
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Charles Abuede
The Central Bank of Nigeria (CBN) has released the framework for the implementation of the Nigerian Youth Investment Fund (NYIF) which will see the disbursement of N75 billion targeted at empowering Nigerian youths financially in a bid to generate five hundred thousand jobs between 2020 and 2023 under the Nigerian Youth Employment Action Plan developed by the Federal Ministry of Youth and Sports Development.
The central bank in a circular published by the department of development finance on its website explained that the major objectives of the plan are to address the fragmentation of youth initiatives that prevent impact assessment, and to provide Nigerian youth with investment inputs required to build successful businesses that can become sustainable employers of labour and contributors to Nigeria’s development.
“The Federal Executive Council approved the sum of seventy five billion naira for the establishment of the Nigeria Youth Investment Fund for the period of 2020 –
2023 dedicated to investing in innovative ideas, skills and talents of Nigerian Youth, and to institutionally provide our youth with a special window for accessing much-needed funds, finances, business management skills and other inputs critical for sustainable enterprise development,” the circular reads.
On the funding, the apex bank disclosed that a seed capital in the tune of N12.5 billion shall be disbursed into the NIRSAL Microfinance Bank window for the initial take-off. However, unregistered businesses shall get a loan term for asset acquisition and improvement to a maximum of N250,000 while registered businesses (Business name, Limited Liability, Cooperative, Commodity Association shall be determined by the activity/nature of project subject to the maximum of N3.0 million, which is inclusive of working capital.
The facility shall be subject to 5 years tenor with a moratorium of up to 1 year depending on the nature of business and an interest rate not more than 5 per cent annually.
It stated that legally allowed activities in the sectors or focal areas listed below shall be eligible: Technology/ Innovation; Agriculture and related value chain; Green Economy and Renewable energy sector; Manufacturing,
Hospitality/Tourism; Construction; Logistics and supply chain; Healthcare value chain, Creative sector and Trading and Services. Others as may be determined by NYIF/CBN from time to time. However, preference shall be given to enterprises that will support the growth of priority sectors, specifically those identified by the Economic and Recovery Growth Plan ERGP and the Nigerian Youth Employment Action Plan.
On the collateral requirement, the CBN stated thus: “The NMFB will leverage on the General Standing Instruction (GSI) as collateral. Corporate guarantees will be acceptable where applicable; while the repayment shall be made on an instalment basis by the beneficiaries to the NMFB according to the nature of enterprise and the repayment schedule/work plan provided and agreed at the application processing stage.”
Meanwhile, in order for the apex bank to ensure equitable participation in the scheme as well as ensuring even access to finance by the youth across the country, the apex bank also revealed that applications will be batched according to State and Local Government Areas (LGA) of applicants.