Following the Central Bank of Nigeria’s directive for all banks to remit five per cent of their profit after tax (PAT) for investment in the Agricultural/Small and Medium Enterprises Investment Scheme, SMEs can now access funds to support their businesses.
This development is coming on the heels of the 331st meeting the Bankers Committee on February 9, 2017, where they approved the Agri-Business/Small and Medium Investment Scheme (AGSMEIS) to support the federal government’s efforts at promoting agricultural business/ Small and Medium Enterprises (SME) as a vehicle for sustainable economic development and employment generation.
Among other things, the objectives of the scheme are to:
- Ensure access to finance Small and Medium Enterprises (SMEs) as these enterprises are the engine of growth of the Nigerian economy.
- Generate much-needed employment opportunities in Nigeria.
- Develop agricultural value chain and ensure sustainable agricultural practices
- Boost the managerial capacity of Agribusiness/SMEs as pipelines of growth.
According to the scheme’s guidelines, investment under the scheme which could be for start-ups, expansion of established companies or reviving of ailing companies, shall be through equity in the form of fresh injection of capital.
Investment shall be made for a maximum period of 10 years. There shall be a lock-up period before exit in order to encourage value creation and boost managerial capacity of the SMEs unless there is material adverse event.
The scheme shall be operated for a period of 10 years in the first instance and be reviewed after five years of its operations.
