CBN Earmarks N500m Grant to Promote Entrepreneurship in Tertiary Institutions
The Central Bank of Nigeria (CBN) yesterday unveiled guidelines for the implementation of its Tertiary Institutions Entrepreneurship Scheme (TIES) by setting aside a total grant of N500 million for five top Nigerian polytechnics and universities with the best entrepreneurial pitches/ideas.
The bank said the grant shall apply in the areas of agribusiness, information technology, creative industry and science and technology.
The CBN added that it would constitute a Body of Experts (BoE) from the private and public sector for the biennial regional and national entrepreneurship competitions to evaluate entrepreneurial and technological innovations submitted by Nigerian polytechnics and universities.
The BoE shall recommend projects with high potential and transformational impact for the grant award.
The CBN also said to promote gender equality, 50 per cent of the term loan component of the scheme shall be earmarked for female-led or -owned projects.
The bank pointed out that the broad objectives of the TIES framework was to among other things, enhance access to finance by undergraduates and graduates of polytechnics and universities in the country with innovative entrepreneurial and technological ideas.
Other specific objectives of the scheme included providing an enabling environment for co-creation, mentorship and development of entrepreneurial and technological innovations;
fast track ideation, creation and acceleration of a culture of innovation-driven entrepreneurship skills among graduates of polytechnics and universities in Nigeria and promote gender balance in entrepreneurship development through capacity development and improved access to finance.
Others are to leapfrog entrepreneurial capacity of undergraduates and graduates for entrepreneurship and economic development in partnership with academia and industry practitioners; and boost contribution of non-oil sector to the nation’s Gross Domestic Product (GDP).
The apex bank stressed that in order to ensure that the scheme achieved its desired objective and targets, the focal targets under the programme shall include Gradpreneur-led innovative start-ups and businesses where 25,000 businesses would have access to finance under the scheme annually.
It stated that sustainable jobs created by 75,000 gradpreneur-led businesses would be financed under the scheme annually while female-gradpreneurs would account for 50 per cent of total projects financed under the scheme per annum.
Furthermore, the bank stated that agropreneurs financed as a percentage of total projects financed under the scheme would constitute 40 per cent per annum while creative entrepreneurs financed as a percentage of total projects financed under the scheme would account for 20 per cent per annum.
Also techpreneurs financed as a percentage of total projects financed under the scheme would represent 20 per cent per annum while other gradpreneurs financed as a percentage of total projects financed under the scheme would be 20 per cent per annum.
The CBN stressed that priority would be given to innovative entrepreneurial activities with high potentials for export, job creation and transformational impact.
On funding for the scheme, the apex bank noted that the take-off capital would be sourced from both the Agribusiness/ Small and Medium Enterprise Investment Scheme (AGSMEIS), adding that the scheme shall be implemented through three components namely term loan, equity Investment and developmental components.
Under the term loan component, individual project would access a maximum of N5 million with a five- year tenor and interest rate of five per cent and nine per cent from March 1, 2022.
Also, for partnership/company project, loan is limited to N25 million with five-year tenor with a five- year tenor and interest rate of five per cent and nine per cent from March 1, 2022.
The bank said focus shall be on both greenfield (new) and brownfield (existing) projects in ratio 40:60, respectively.
The CBN further stated that the scheme shall be operated for a period of 10 years in the first instance, not exceeding 31st December 31, 2031, depending on the complexity of the project.
The guidelines among other things spelt out penalties for fractions by stakeholders under the scheme.
The central bank stated that the scheme was pursuant to the CBN Act, 2007, and as part of its policy measures to address rising youth unemployment and underemployment.
The framework was developed in partnership with Nigerian polytechnics and universities to harness the potential of graduate entrepreneurs (gradpreneurs) in Nigeria.
The scheme was also designed 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 thus aims to provide an innovative financing model that will create jobs, enhance the entrepreneurial ecosystem and support economic growth and development,” the bank added.