The Central Bank of Nigeria (CBN) has announced that it reserves 60% of its N220 billion Micro, Small and Medium Enterprises Development Fund for women entrepreneurs.
The apex bank also added that 2% of the wholesale component of the fund would be given to economically active persons with disabilities, as 10% is meant for start-up businesses.
This was disclosed by the bank in the guidelines it issued for micro, small and medium enterprises development fund for non-interest financial institutions.
Last June, the Federal Government of Nigeria had announced it would roll out palliatives to assist women-owned medium and small businesses (MSME’s) recover from the impact of the pandemic.
Minister of Women Affairs, Mrs. Pauline Tallen, explained that the National Survey on the impact of COVID-19 on women-owned businesses in Nigeria captured trends and patterns of the losses caused by the pandemic on women-owned businesses, and will now guide the government’s move to revive the affected businesses. She said:
“The impact of the pandemic on micro, small and medium enterprises (MSMEs) has been quite massive, and resulted in unforeseen losses for business owners.”
Why does it matter?
The MSMEs sub-sector is characterised by huge financing gap, which hinders the development of MSMEs, and in turn, the development of the Nigerian economy.
“Section 6.10 of the Revised Microfinance Policy, Regulatory and Supervisory Framework for Nigeria, stipulates that ‘a Microfinance Development Fund shall be set up, primarily to provide for the wholesale funding requirements of MFBs/MFIs’.
“To fulfil the provisions of section 4.2 (iv) of the policy, which stipulates that women’s access to financial services to increase by at least 15% annually to eliminate gender disparity, 60% of the Fund has been earmarked for providing financial services to women.”
What does it mean?
The fund prescribes 50:50 ratio for on-financing to micro enterprises and SMEs respectively by Participating Financial Institutions.
The commercial component will constitute 90% of the Fund which to be disbursed in the form of wholesale funding to the PFIs.
This is definitely a step in the right direction for the furtherance of women's inclusion in the financial and economic fabric of the Nigerian nation.