In 2019, the Central Bank of Nigeria (CBN) announced policies and programmes to create 10 million jobs in five years.
The initiative was in response to President Muhammadu Buhari’s resolve to lift 100 million Nigerians out of poverty through job creation and economic diversification.
One of the programmes the CBN came up with is the Tertiary Institutions Entrepreneurship Scheme (TIES).
The programme is meant to stem the tide of graduates chasing white-collar jobs. To encourage the spirit of entrepreneurship in young graduates, CBN has initiated an intervention programme designed to address unemployment and underemployment as well as lack of enthusiasm by graduates to start up a business either while in school or shortly after.
On the TIES programme, CBN Governor Godwin Emefiele said the scheme is developed “in partnership with Nigerian polytechnics and universities to harness the potential of graduate entrepreneurs by creating a paradigm shift from the pursuit of white-collar jobs to a culture of entrepreneurship for economic development and job creation.”
The Central Bank is collaborating with some tertiary institutions to develop entrepreneurship programmes, and to support—through provision of access to finance—graduates and undergraduates with bankable ideas.
Engagements are on between CBN and the management of some of the institutions to develop a “framework for an innovative financing model that will support entrepreneurship development among our graduates and undergraduates.”
As a first step, CBN wants the authorities of these institutions to provide land from their large real estate. By providing lands for students to test their entrepreneurial desires before graduation, CBN noted, the institutions will help the graduates hone up their entrepreneurial spirit.
Emefiele said: “With about 600,000 students graduating yearly from Nigerian tertiary institutions, and without commensurate employment opportunities in both public and private sectors, it has become imperative that governments, at all levels, put in place policy measures to support entrepreneurial development among our youths.”
Such measures, he argued, “would create an enabling business ecosystem that supports innovation and enables the youth to unleash their entrepreneurial potential, by redirect their focus from seeking white-collar jobs to a culture of entrepreneurship development.”
The ecosystem, he added, “should provide support in re-orientating, training, and providing a financing model apt to the peculiarity of the sector within which the businesses operate.”
With an estimated population of 213 million, two-thirds of which are youths, aged under 35 years, Nigeria, Emefiele said, “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, CBN introduced several innovative financing programmes designed to extend low-cost financing to youth entrepreneurs.
These interventions have proved effective in extending credit to youth entrepreneurs.
In October, CBN released implementation guidelines for TIES and opened the portal for submission of applications.
The essence of the scheme is to provide an innovative financing model “that will support the development of innovative entrepreneurial ideas among graduates and undergraduates of tertiary institutions in Nigeria.”
TIES will bridge the financing gaps that have previously prevented young Nigerians from accessing low-cost credit to drive development of business ideas. The scheme is designed to address three segments:
The Term Loan Component
This component provides direct credit opportunities to graduates of polytechnics and universities of not more than seven years post-graduation.
An applicant, if successful, will be eligible for a maximum N5 million for an individual, sole-proprietorship or small company; and a maximum N25 million for a partnership or company.
The tenor for the facility is five years maximum, with a one-year moratorium, and at an interest of five per cent per annum, which will revert to nine per cent from March 2022.
The pilot phase of the scheme is being implemented through Bank of Industry (BOI), with the development of an application portal and the processing of submitted applications.
This component is the second and is designed to support start-ups, existing businesses requiring expansion, and ailing businesses seeking resuscitation.
This component will be implemented under the CBN’s AGSMEIS Equity Window. As a result, the investment limit will be subject to the limit prescribed by the AGSMEIS Guidelines and the investment period will not be more than 10 years.
The Developmental Grant Component
This is the last component and is aimed at raising awareness and visibility of entrepreneurship among undergraduates of tertiary institutions.
Here, polytechnics and universities will compete in a national biennial entrepreneurship competition where undergraduates are presented by the tertiary institutions to pitch innovative entrepreneurial or technological ideas capable of transforming the system.
Three top institutions at the regional levels will proceed to the national level, where five will be awarded grants ranging from N120 million to N250 million.
Emefiele emphasised that the grant awards are to “be used by the tertiary institutions solely for the development of the award-willing ideas.”
As for the other two components, the CBN governor insisted that the facilities are loans (not grants) that must be paid back.
A Body of Experts (BoE) has been constituted to evaluate and rank entrepreneurial presentations made by tertiary institutions under the Developmental (Grant) Component. They will also “recommend projects with high potential and transformational impact for grant awards.”
Members of the BoE are Chairman – Abubakar Suleiman (Sterling Bank); (all members) Patrick Iyamabo (First Bank); Adamu Lawani (Zenith Bank); Ms Ngover Ihyembe-Nwankwo (Rand Merchant Bank); Ashafa Ladan (National Universities Commission); Abbati D.K. Muhammad (National Board for Technical Education); Friday Okpara (SMEDAN); Tope Fasua (Global Analytics Consulting); Brigadier-General Folusho Oyinlola (National Defence College); Ms Bolanle Adekoya (PWC); and Mrs Temitope Akin-Fadeyi (CBN), as secretary.
Five beneficiaries have been selected under the Term Loan Component. They were among those who submitted their applications via the dedicated portal and had their applications processed.
Emefiele urged these sets of recipients “to judiciously utilise the funds for the purpose for which you had indicated in your applications. It is my strong belief that the scheme will offer our youth entrepreneurs access to finance, which has been identified as a major limiting factors to entrepreneurship development in Nigeria.”
The CBN governor assured other institutions that did not participate at the first offer that they will be brought on board over time.
He said: “With ongoing dialogue and engagements with other segments of the educational sector, feedbacks received shall form the basis for the periodic review of the guidelines, with the intent to scale up participation under the scheme in future.”
To the graduates and undergraduates, Emefiele appealed to them “not to succumb to the weight of despair regarding the challenges being faced by the nation.”
He challenged them “to pull yourselves up by your bootstraps, take up the challenge of undertaking that paradigm shift, by applying innovative and creative thinking in providing solutions capable of creating wealth and value for yourself, your community and the nation.”
On the TIES initiative, CBN’s Director of Development Finance Philip Yila said in selecting the first five beneficiaries, CBN looked at “activities that are job-stimulating that will contribute to economic growth, things, such as lucrative industries that we know a lot of our youth really do, such as agribusiness. Agric is the priority of President Buhari and the Governor of the Central Bank Godwin Emefiele. We are also looking at things that will contribute to export, you know things that will employ people over time.”
Yila described TIES as “one of our successful interventions. I visited one of the beneficiaries who took about N1.7 million some weeks ago. He currently employs about 10 people.
“He is embarking on bricklaying. He has a block making industry, so those are the kind of things we want to see a lot of our people doing things, such as fashion, things as bakery, you know things that employ people that contribute to economic growth and ultimately contribute to output in the country.”
Yila noted that “every year all the banks contribute five per cent of their profits after tax into a pot and it’s that pot that would be used to disburse funds to these beneficiaries. Also, the BoE will evaluate entries from tertiary institutions and those successful, the top five, will receive grants of between N250 million and N150 million.”
The grant, he said, is to stimulate more ideas. “You know monetise their ideas, just to help them do some work on their ideas and then those ideas eventually will be used, for example, if a particular university wants to develop a high-speed variety, for example, for maize and they are successful we will look at how we can work with those universities apart from giving them the grant to use those seeds for the various programmes.”
Yila added: “We have a large maize programme, we also have the Commercial Agric Credit Scheme so those that we will fund eventually would now be using those seeds, remember that it’s the universities that have the idea so they will monetise it and then at the end of the day they can contribute output and begin to sell those seeds to some of the anchors we work with on our Anchor Borrowers’ Programme (ABP) and on our Commercial Credit Scheme.”
Funding for the TIES programme he assured, will be sustained since money will be drawn from the “pot” into which banks contribute five per cent of their profit annually, thus guaranteeing a steady stream of funds for all CBN’s interventions.
Aisha Sulieman, an Applied Biology graduate of Bayero University, Kano State, who is into cashew nut processing, said she qualified because “I have a better business plan and my business is like out of the books. It’s not so common. I chose the business because where I am situated we have more cashew trees so utilising the nuts is actually great and is a business opportunity.”
She added that “cashew nuts is a little bit expensive now, it’s kind of seasonal, the rate and the price of cashew nuts are actually seasonal so at some point, you get it a little cheaper and atimes expensive.”
She intends to utilise her loan “in buying more machinery because before now we actually take our product for nut shelling and grading, so with the money I can get mine.”
