CBN, Bankers Committee revs up support for creative, ICT sectors

Barring any unforeseen circumstances, the creative (music, movies, fashion) and the information and communication technologies (ICT) sectors will any moment from March 2019 begin to receive significant intervention from the CBN and the Bankers Committee. This is because, during its 342nd meeting held in Abuja February, the Bankers Committee said its setting aside special funds […]

Barring any unforeseen circumstances, the creative (music, movies, fashion) and the information and communication technologies (ICT) sectors will any moment from March 2019 begin to receive significant intervention from the CBN and the Bankers Committee.

This is because, during its 342nd meeting held in Abuja February, the Bankers Committee said its setting aside special funds to provide capacity and support to the creative and the ICT industries.

Though the exact amount of the funds hasn’t been pegged, our correspondent learnt that it could be about N5 billion in the first instance. Based on the performance of the sectors being intervened in, the amount could improve significantly.

This is because the initiative will be funded from at least 5 percent of the Agribusiness/Small and Medium Enterprises Investment Scheme (AGSMEIS). The AGSMEIS is a special fund that sees banks reserve 5 percent of their profits after tax to fund agriculture and small businesses. The fund was tipped to reach N90bn by the end of 2018.

Briefing journalists at the end of the 342nd meeting, Mr. Herbert Wigwe, MD/CEO Access Bank, said the intervention will be for the music, movies, fashion and ICT sectors.

“The Bankers Committee after a lot of research identified the ICT and creative sectors as critical sectors to support social and inclusive growth in Nigeria. We found out that that sectors will generate significant amount of jobs and contribute to GDP growth,” he said while explaining the reasons for the direct interventions in those areas.

He said “Nigerians in the creative sector – music, movies etc – have done very well. This has had significant impact on employment and the gross domestic product (GDP). These sectors may also impact the tourism industry if well developed. It will also bring in a significant amount of forex earning,” he noted.

“There are four specific areas we will be supporting. We will be supporting the movies industry, the music industry, the fashion industry and the IT industry. The Bankers Committee will help provide the relevant infrastructure and funding to create shared infrastructure for these industries,” he explained further.

According to him, going forward, “we could create music academies, technology hubs, world class fashion shared facilities and also provide support for those who also want to build capacities in these sectors.”

Mr. Wigwe also said that the funding will be under reasonable interest rates and structures until they become profitable, adding that hopefully Nigeria should begin to see the impact in the next quarter.

“The specific amount hasn’t been agreed on but the rough estimates have been worked out. That nature of funding will be long term debts with reasonable interest rates of single digit,” he explained, adding that beneficiaries may not bring significant equities even though demand will be looked at on a case by case basis.

Also commenting, the Director, Development Finance, CBN, Dr. Mudashiru Olaitan, said with the support, the about 37 million MSMEs in Nigeria will be able to support more jobs.

The Bankers Committee is also looking at providing shared power facilities to power the MSMEs for productivity, he said, adding that already the pilots have commenced in Aba, Kano, Lagos and Ibadan.

“If you, each of the 37 million MSMEs, create about 5 jobs, you can imagine the quantum of employment that will be on the economy,” he said.

Already, MSMEs are excited at the decision by the Bankers Committee. A fashion designer, Miss Evelyn Oguche, who spoke to our correspondent over the matter said the news is cheering and hopes the Bankers Committee will make the eligibility criteria friendly.

“It is a good development. But I hope it won’t go the way of other schemes that are supposedly for small businesses yet small businesses can’t access the funds due to cut throat conditions. I hope the terms would be flexible enough,” she said.

She also said perhaps MSMEs that have taken advantage of the collateral registry can benefit from the loans, adding that the Bankers Committee should make the conditions public. She also called for significant awareness creation over the initiative.

She particularly welcomed the idea of the bankers building state of the art facilities where interested entrepreneurs can share facilities as that would drive down cost of production and drive outputs thus making Nigerians’ MSMEs competitive with other countries’.

Recall that the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, had on April 12, 2018, flagged off the disbursement of funds to the first set of beneficiaries under the Agribusiness/Small and Medium Enterprises Investment Scheme (AGSMEIS), an initiative of the Bankers’ Committee, noting that the challenges of youth unemployment and restiveness must be confronted with strategic innovative thinking to provide sustainable solution.

Addressing over 300 beneficiaries at the flag-off ceremony held at the Head Office of the CBN in Abuja, Mr. Emefiele, who was flanked by the four Deputy Governors of the Bank and Chief Executive Officers of all Deposit Money Banks (DMBs) in Nigeria, said the disbursement was in fulfilment of the commitment jointly made by the Bankers’ Committee during its 2016 Retreat, to design and fund a suitable scheme aimed at reducing the huge financing gap for Micro, Small and Medium Enterprises (MSMEs).

He said the fund also aimed at job creation, financial inclusion and inclusive growth for Nigerians, particularly the teeming youth population.

Further to the 2016 commitment, he recalled that the Bankers’ Committee at its 331st meeting held on February 9, 2017, came up with the AGSMEIS as an initiative to improve access to affordable financing for MSMEs, particularly those operating in the informal sector of the economy and to support the Federal Government’s efforts and policy measures to promote sustainable economic development and employment generation.

To ensure the successful implementation of the scheme, he disclosed that all deposit money banks in the country, voluntarily agreed to set aside and contribute 5 percent of their Profit After Tax (PAT) annually to finance eligible projects under the scheme, which stood at about N26 billion and was expected to exceed N60 billion by June 2018.