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Breaking: How Nigerian graduates can access N5m, N25m to fund projects -CBN

To address the rising youth unemployment in the country, the Central Bank of Nigeria (CBN) has designed a scheme to create a paradigm shift among undergraduates and graduates from the pursuit of white-collar jobs to a culture of entrepreneurship development for economic development and job creation.

The scheme, the Tertiary Institutions Entrepreneurship Scheme (TIES), is in partnership with Nigerian polytechnics and universities with the aim of harnessing the potential of graduate entrepreneurs (gradpreneurs) in Nigeria.

With this scheme, Nigerian graduates will be able to access N5 million or N25 million at five per cent interest rate with a moratorium of 12 months and five-year tenor.

According to the guidelines released by the CBN on Wednesday, to be eligible for the scheme, applicants must be graduates of Nigerian polytechnics and universities with: i. First degree certificate (BSc/HND/ or its equivalent); ii. National Youth Service Certificate (NYSC) discharge or exemption certificate; iii. Certificate of Participation issued by polytechnics and universities evidencing entrepreneurship training; and iv. Not more than seven years post-NYSC.

According to the CBN, activities to be covered under the scheme include innovative start-ups and existing businesses owned by graduates in the following areas:

Agribusiness – production, processing, storage and logistics;
Information technology – application/software development, business process outsourcing, robotics, data management;
iii. Creative industry – entertainment, artwork, publishing, culinary/event management, fashion, photography, beauty/cosmetics;

Science and technology – medical innovation, robotics, ticketing systems, traffic systems, renewable energy, waste management.
However, priority will be given to innovative entrepreneurial activities with high potentials for export, job creation and transformational impact.

The funding is classified into two categories. The Tier 1 has to deal with Individual projects. Under this category, the loan limit is N5 million with a five-year tenor at 5% per annum (9% effective from March 1, 2022 or as may be prescribed by the CBN). The moratorium is maximum of 12 months on principal and interest.

The Tier 2 category has to deal with Partnership/Company projects. The loan limit is N25 million with a five-year tenor at 5% per annum.

Documentation required for the loan, according to CBN, are: registration with the Corporate Affairs Commission (CAC) and certified true copies (CTC) of relevant forms submitted; Bank Verification Number (BVN); First degree certificate (BSc/HND or its equivalent); National Youth Service Certificate (NYSC) discharge or exemption certificate; and Certificate of Participation issued by polytechnics and universities evidencing entrepreneurship training.

The collateral for the loan is a duly signed Global Standing Instruction (GSI); and third-party guarantee from a senior federal/state civil or public servant (not below level 10 and not having less than 5 years to retire from service), clergy of note and reputation or recognized traditional ruler.

The Bank, in the guidelines, stated that applications shall be submitted on a dedicated online portal (https://cbnties.com.ng), with copies of relevant documents attached for review.

Documents to be uploaded on the portal include:

First degree certificate (BSc/HND/or its equivalent);
National Youth Service Certificate (NYSC) discharge or exemption certificate;
Certificate of Participation issued by polytechnics and universities evidencing entrepreneurship training;
Letter confirming the applicants’ deposit of required certificates from PFI;
Projected Statement of Income, Statement of Affairs, and cash flow projections for start-ups and businesses with less than 3 years of operations;
Business plan outlining details, financials and economic benefits of the projects.

The portal is designed to allow the applicants select its PFI of choice, which shall receive copies of the submitted applications for due diligence checks and subsequent disbursement and monitoring of financed projects;

Upon approval of application by the CBN, the approved sum shall be released to applicants’ PFIs of choice in accordance with the approved disbursement schedule;

The PFI will disburse the released funds into the applicants’ accounts within five working days with no restriction on access, upon compliance with the terms for withdrawal;

The CBN stated that interest payment and principal repayment shall be made on monthly or quarterly basis by the obligor depending on the established cash flow cycle and in line with the approved repayment schedule.

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