Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, on Thursday launched the apex bank’s N500 million Tertiary Institutions Entrepreneurship Scheme (TIES).
Speaking at the launch of the scheme in Abuja, Emefiele said the intervention would create an enabling business environment that supports innovation. It would also enable the youth to unleash their entrepreneurial potential, by redirecting their focus from seeking white-collar jobs to embracing a culture of entrepreneurship, he said.
The initiative, which the CBN governor hinted at earlier this year, was expected to boost entrepreneurship in higher institutions of learning.
Emefiele stressed the need for the environment to provide support in re-orientating, training, and providing a financing model apt to the peculiarities of the sector within which the businesses operate.
He urged government at all levels to evolve policy measures to support entrepreneurial development among the youth in the country. The CBN governor said this was particularly crucial given that about 600,000 students graduate yearly from Nigerian tertiary institutions without commensurate employment opportunities in both the public and private sectors.
Emefiele said the essence of the intervention was to create a paradigm shift from the obsession for white-collar jobs among graduates and promote entrepreneurship. He said the CBN was particularly concerned about the current level of unemployment among the youth population.
He explained that the intervention consisted of three main components, including term loan, equity investment, and development grant.
Emefiele said the scheme would make it easy for youths to access credit and create jobs for themselves and others. He warned that the finance to be provided was not a grant but a loan, which should be used for the intended purposes.
He said entrepreneurship remained an integral part of any economy, adding that entrepreneurs play a key role in driving growth and innovation, which in turn results in job creation.
Emefiele said in line with its mandate of ensuring monetary and price stability, and its developmental mandate of ensuring inclusive growth in the economy, the central bank had introduced several programmes to create an ecosystem that allowed the flow of affordable credit to the real sector.
He added that these interventions were industry-led and designed to support the resilience of targeted priority sectors and segments for growth and job creation.
He explained, “With an estimated population of 213 million, out of which two-third are youth, aged under 35 years, the nation is faced with a historic opportunity, particularly as the demography continues to create clear evidence of their relevance to economic development, as accentuated by the global recognition of Nigerian tech start-ups and continued growth of businesses in the technology space owned by the youth.
“In realisation of this, the CBN has introduced several innovative financing programmes designed to extend low-cost financing to youth entrepreneurs across the country.
“These interventions have continued to receive resounding commendations, as they have proven effective in extending credit to youth entrepreneurs across the country.”
Essentially, he said TIES was conceived as part of measures to promote entrepreneurship development among the graduate and undergraduate youths of Nigerian polytechnics and universities, with the release of the implementation guidelines and the opening of a portal for submission of applications in October 2021.
The scheme aims at providing an innovative financing model that will support the development of innovative entrepreneurial ideas among graduates and undergraduates of tertiary institutions in the country, the CBN governor said.
The ceremony also witnessed the inauguration of the Body of Experts (BoE) by the CBN governor. The body, chaired by the Group Managing Director/Chief Executive, Sterling Bank Plc, Mr. Abubakar Suleiman, among other professionals, seeks to evaluate and rank entrepreneurial presentations made by the tertiary institutions under the development (grant) component.
Emefiele said members of the body were professionals of impeccable standing, drawn from the academia, professional bodies, and industry. He said part of their job was to recommend projects with high potential and transformational impact for grant awards.
Other members of the BoE include Chief Financial Officer, First Bank Plc, Mr. Patrick Iyamabo; Mr. Adamu Lawani (Zenith Bank Plc); Ms. Ngover Ihyembe-Nwankwo (Rand Merchant Bank); Mr. Ashafa Ladan (National Universities Commission); Mr. Abbati D.K. Muhammad (National Board for Technical Education); Dr. Friday Okpara of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN); Mr. Tope Fasua (Global Analytics Consulting); Brigadier-General Folusho Oyinlola (National Defence College); and Ms. Bolanle Adekoya (PWC). Mrs. Temitope Akin-Fadeyi of the CBN is the body’s secretary.
Emefiele said the official launch of the TIES and subsequent inauguration of the BoE for the scheme’s development component was a testimony to the important role the youth play in building new blocks for economic growth, particularly as national growth was highly dependent on strong and competitive businesses.
He said bridging their financing gaps and enhancing access to low-cost credit to drive development of business was a task that could only be addressed by an innovative financing model that correlates with the complexity and dynamics of these small businesses.
Emefiele said the scheme was designed to address three verticals of the segment namely, term loan component, which provides direct credit opportunities to graduates of Nigerian polytechnics and universities of not more than seven years post-graduation.
He said an applicant, if successful, should be eligible for a maximum of N5 million for an individual, sole-proprietorship or small company; and a maximum of N25 million for a partnership or company.
The tenure of the facility is a maximum of five years, with a one-year moratorium, and at an interest of five per cent per annum, which shall revert to nine per cent from March 2022.
The pilot phase of the scheme is presently being implemented through the Bank of Industry (BOI) with the development of an application portal and processing of submitted applications.
The equity investment component is designed to support start-ups, existing businesses requiring expansion, and ailing businesses seeking resuscitation, and shall be implemented under the bank’s AGSMEIS equity window.
The investment limit shall be subject to the limit prescribed by the AGSMEIS guidelines and the investment period not more than 10 years.
Emefiele also noted that the development grant component was aimed at raising awareness and visibility of entrepreneurship among undergraduates of Nigerian tertiary institutions. He explained that here, polytechnics and universities in the country shall compete in a national biennial entrepreneurship competition where undergraduates are presented by the tertiary institutions to pitch innovative entrepreneurial or technological ideas with transformational potential.
According to him, three top institutions at the regional levels shall proceed to the national level, where the top five shall be awarded grants ranging between N120 million and N250 million.
He insisted that the grant awards should be used by the tertiary institutions solely for the development of the award-willing ideas.
Further commenting on the genesis of the scheme, Emefiele said, “As you are all aware, at the occasion of the 51st convocation of the University of Lagos, in July 2021, I delivered the convocation lecture, titled, “National Development and Knowledge Economy in the Digital Age: Leapfrogging SMEs into the 21st Century.”
“At that event, I promised that the central bank would seek fresh collaboration with the nation’s tertiary institutions to develop entrepreneurship programmes, and to support – through the provision of access to finance – graduates and undergraduates who have bankable ideas, to bring the ideas to fruition.
“Engagements have been on-going between the central bank and the leadership of some of our tertiary institutions regarding the framework for an innovative financing model that will support entrepreneurship development among our graduates and undergraduates.
“This launch of the Tertiary Institutions Entrepreneurship Scheme today, is a culmination of the engagements and fulfilment of that promise.”
Highlights of the event included the presentation of commemorative cheques to five youth entrepreneurs whose proposals were found worthy of CBN’s financing under the pilot scheme.
Speaking during the launch of the initiative, Secretary to the Government of the Federation (SGF), Mr. Boss Mustapha, hailed the efforts of the central bank to ensure that the economy remained afloat despite the disruptions occasioned by the COVID-19 pandemic.
Represented by the Director, Public Affairs and Bilateral Relations, Office of the SGF, Mr. Olakunle Fashina, Mustapha said, not only would the TIES boost economic growth and reduce graduate unemployment but it would also provide well-grounded incentives for the ever-growing graduate population.
He urged the tertiary institutions to deploy merit in the selection of the proposed beneficiaries of the scheme as well as monitor key performance indicators as applications are submitted.
Speaking at the occasion also, Minister of Education, Mallam Adamu Adamu, described the intervention as a laudable effort by Emefiele to promote entrepreneurial skills in the ivory towers. He said the CBN was playing a significant role in laying a solid foundation for technological development in the tertiary institutions.
The minister, who was represented by the ministry’s Director, University Education, Mrs. Rakiya Iliyasu, he said no country could make appreciable growth in sound technological innovation and sustainable development without focusing on the base, which is the institutions responsible for training the students in the fields of agribusiness, information technology, creative industries among others.
He said it was on record that the scheme was designed to create a paradigm shift among graduates from the pursuit of white-collar jobs to entrepreneurship geared towards job creation and economic growth.
James Emejo in Abuja