Business
CBN battles youth unemployment through YEDP, NYIF, others
BY EMEKA EJERE
Driven by the successes of previous initiatives, the Godwin Emefiele-led Central Bank of Nigeria (CBN), is increasingly directing resources at unlocking entrepreneurial potentials of the nation’s youth in the interest of economic diversification and growth, available documents show.
Even before the introduction late last year of the Tertiary Institutions Entrepreneurship Scheme (TIES), the CBN had been in the business of supporting this viable segment of the population with affordable and accessible credit, launching other youth-targeted loan schemes with distinctive features.
This is in recognition of the critical place of finance in the process of translating brilliant ideas, mostly common among the youths, to businesses that will in turn employ more hands, thereby widening government’s revenue base among other gains.
However, what all of the schemes share in common with TIES is that they enhance access to affordable credit to young entrepreneurs, with a view to encouraging job and wealth creation.
YEDP
One of the programmes, the Youth Entrepreneurship Development Programme (YEDP), was unveiled on 15th March, 2016 to tap the ingenuity and resourcefulness of Nigerian youths for optimum stimulation of the economy.
Accordingly, the CBN in partnership with the National Youth Service Corps (NYSC) and Heritage Bank, began the pilot phase of the scheme to inspire and harvest the entrepreneurial abilities of Nigerian youths towards creating over one million direct jobs in a few years.
According to the apex bank, the YEDP is aimed at fixing the triple-barreled constraints of insufficiency, high cost and inadequate term of capital usually faced by youth entrepreneurs and startups.
It offers credit of up to N3 million to eligible youth or N10 million for groups of three to five youths, with interest rate of nine per cent per annum. Beneficiaries can be encouraged to migrate to other CBN interventions to obtain more funding if they utilise the YEDP facility properly.
The CBN Governor, Mr. Godwin Emefiele, had said the YEDP has the potential of becoming the stimulus for job and wealth creation, growth and economic development through improved access to finance by young entrepreneurs.
He stated that the programme was aimed at providing affordable credit to identified youth entrepreneurs with expected multiplier effect on job creation and economic growth. This, according to him, was also to ensure that the creative energies of the over 64 million Nigerian youths were harnessed to stimulate growth, address restiveness and promote economic development.
The loan requirement under the scheme is deliberately made less rigorous. Ccllateral needed are only: academic and NYSC certificates, third party guarantees and other movable assets. Cost of training for pre-qualified applicants is shared between the CBN and the lending bank at 50:50 or any other agreed ratio. While the grant credit is designed for only activities covered under the guidelines, assets accepted or financed as collaterals for the loan with the National Collateral Registry NCR are welcomed.
Target beneficiaries under YEDP are members of NYSC, non-NYSC but not more than five years post-NYSC, but it must be those who have a verifiable tertiary institution certificate, and artisans with First School Leaving Certificate or a technical certificate or accredited proficiency certificate from the National Board for Technical Education (NBTE), whichever is applicable.
Activities eligible for financing under the scheme include startups and expansion projects in agricultural value chains (fish farming, poultry, snail farming, etc.), cottage Industry, creative industry (tourism, arts and crafts) and Information and Communications Technology (ICT) among others.
NYIF
The Nigeria Youth Investment Fund (NYIF) is an initiative of the Federal Ministry of Youth and Sports Development (FMYSD) funded by the CBN. It is aimed at empowering Nigerian youths to create about 500,000 jobs over the period up to 2023.
According to the NYIF framework by the apex bank, the businesses and activities that are legally allowed to be eligible to participate in the scheme include: technology/innovation, agriculture and its related value chain, green economy and the renewable energy sector.
Others are manufacturing, hospitality/tourism, construction, logistics and supply chain, healthcare value chain, the creative sector, trading and services, as well as others that would be certified by the CBN from time to time.
The administration of the N75 billion NYIF at five per cent interest rate with one year moratorium is mainly the responsibility of FMYSD, in recognition of the fact that it is the ministry that is saddled with matters that relate to the youth.
The Minister of Youth and Sports Development, Sunday Dare, described the NYIF as a demonstration of the importance placed on youths by the Federal Government and the CBN,
“Since beneficiaries are expected to have a Bank Verification Number (BVN), it will help to bring a lot of informal businesses into the formal sector”, said Uche Uwaleke, Professor of Capital Market, Nasarawa State University, Keffi.
He suggested that to ensure effective disbursement and optimal utilisation of the funds “fresh graduates from the National Youth Service Corps should be the primary target because the proposed training by the Ministry of Youth will be easier to handle with NYSC graduates.
“To this end, the age bracket should be reduced from 18-38 years to 21-30 years. This safeguard is necessary; else there is the tendency for people to falsify their ages in order to benefit from the fund.”
The Nigerian Youth Employment Action Plan was established to address fragmentation of youth initiatives that prevent assessment of impact, and to provide Nigeria youth with investment inputs required to build successful businesses that can become sustainable employers of labour and contributors to Nigeria’s development.
The plan targets young people between the ages of 18-35 years and details the needed actions required to support business establishment, expansion and consequent employment creation for youth in critical economic and social sectors.
NIRSAL Microfinance Bank (NMFB) is serving as the managing agent of the CBN contributions to the programme in order to ensure the guidelines are adhered to. The NIRSAL MFB window is funded with an initial take-off seed capital of N12.5 billion.
AADS
Under the Accelerated Agriculture Development Scheme (AADS), the apex bank authorised the commercial banks to give up to N2 billion maximum loan to youths interested in agriculture at five per cent interest rate per annum.
The scheme was created by the banking sector regulator in collaboration with state governments to engage 370,000 youth in agriculture.
According to the loan guideline, the maximum loan accessible under the scheme shall be N2 billion per obligor. The CBN observed that the country’s population pyramid was bulging around the youth segment, with an estimated 75 per cent of the population identified to be aged below 35 years.
In a reaction, the All Farmers Association of Nigeria (AFAN), the umbrella body of all farmers in Nigeria, commended the Federal Government and the CBN, pointing out that the intervention loan would really boost job creation through agro-allied value chains.
Lagos Chapter Chairman of AFAN, Dr. Femi Oke, hailed the CBN for coming up with another agric sector intervention loan, now specifically for the youths in the country, saying it was going to open doors of opportunities for the teeming youths aspiring to go into agriculture.
Creative Industries Park.
Also, to further boost the creative sector’s contribution to the Gross Domestic Product (GDP), CBN last year unveiled plans for development of creative industries park across three major cities – Lagos, Kano, Port Harcourt or Enugu with the youths as main target.
Speaking at the Creative Nigeria Summit in Lagos, Emefiele stated that with the support of the Federal and Lagos State Governments, the National Theatre Iganmu in Lagos would serve as the initial pilot for the Creative Industries Park, adding that efforts would be focused on discovering the most innovative young entrepreneurs across the music, movie, fashion and Information Technology (IT) industries.
The CBN and Bankers Committee see it as a necessity to create opportunities for these youths to access credit and bank loans to grow their businesses.
“Each park will be able to support skills acquisition for over 200,000 Nigerians”, Emefiele said.
“We cannot afford to let the talents of our youthful population go to waste, as it would portend great dangers for the progress of our nation.”
SANUSI Muhammad
January 2, 2023 at 7:57 pm
I want to hear more about this program.