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CBN’s policy support raises bar for female entrepreneurs




Under the current administration, women entrepreneurs have fared better, and mediating this advantage for women’s business is Mr. Godwin Emefiele-led Central Bank of Nigeria. Just last week, the apex bank said it has reserved 60% of N220 billion MSMEs fund for women. This is no doubt cheering news for women entrepreneurs.

Recall that in 2015, CBN provided N252 billion fund to support women-owned businesses. Back then, the facility was 60 per cent of the N420bn CBN credit facility for SMEs in the country. The then deputy governor of the bank, now presidential adviser, Dr. Sarah Alade, said the apex bank had earmarked the sum of N252 billion as a credit to support businesses owned by women in Nigeria.

She said the facility was dedicated to helping boost the performance of the Small and Medium-scale Enterprises (SMEs) in the country.  Note that the apex bank has, at various times, projected its commitment to deepening and increasing access to credit to the SME sub-sector.

Commenting on the past efforts of CBN to encourage female business, Dr. Olufemi Omoyele of the Department of Management, Redeemers University, said “Under Emefiele, we have witnessed substantial patronage of female business. This is encouraging in order to achieve financial autonomy for women. These moves by the apex bank are commendable, and they are   critical to the development of any economy because of its potential for employment creation and income generation. Unfortunately, women are particularly disadvantaged in terms of access to credit.

Dr. Alade, then stated that the N252 billion fund the bank set aside “will help reduce the high cost of funds for women-owned businesses across the country. In spite of the enormous contribution of the CBN, women entrepreneurs still face gargantuan challenges that continue to limit their growth.

Chief among these is limited access to funding. Dr. Ahmed Mohammed, a political economist told BusinessHallmark that lack of access to finance “is the biggest challenge faced by women-owned businesses across Nigeria as access to capital is crucial to any small business’ growth trajectory. Women face greater obstacles than men when starting and growing a business, especially when it comes to venture capitalists, financial institutions, and other lenders; who are quick to deny their applications.

“Basically, even when the woman-owned business demonstrates a great business plan, has excellent credit, and demonstrate solid cash flow, it must also successfully navigate through a process that tends to unfairly favour male-run startups. And when they eventually access required capital, the interest rates are rather steep and this tends to handicap the business over the long run. For women-owned businesses to thrive, it is vital for the Nigerian society as a whole to ensure that women have equal chances to do great things.

It should be noted that women-owned businesses grew by 2.3 per cent while the male counterparts grew only by 0.3 per cent, according to 2011 data. Aminu Ridwan, a researcher at Statistica, a financial resource concern said “Access to Finance is often cited as one of the major factors impeding the growth of women-owned businesses in developing countries, and this is especially true in Nigeria.

The key barriers include lack of ownership of collateral – as tradition would seldom cede property rights to women; coupled with the absence of credit history – owing to the fact that most women businesses are informally organized.

He told this newspaper that “Improving financial support for women would increase the number of new businesses, which in turn, would boost economic activity, enable the expansion of old businesses, leading to increased productivity and growth. Financial empowerment enhances the bargaining power of women at the family level and this allows larger latitude for investment in child nutrition, health and education, thereby regenerating the future workforce.

He stated that beyond the family, financial freedom is a precursor to gender equality and consequently, the assurance of social security.

“Women”, he said, “constitute not only a formidable demographic force but are also responsible for the youth that makes up the next generation. Therefore, their well being has implications not only for their own lives, but also for the society at large. Their ability to play this role effectively depends on how far the society supports their development.

 Towards this end, he commended the CBN’s dedication of 60% of N220 billion MSMEs fund for women. The sub-sector of women entrepreneurship is defined by huge financing gap, which has significantly hindered the development of MSMEs.

Commenting on the fund, the Central Bank of Nigeria (CBN) said the 60% of its N220 bn Micro, Small and Medium Enterprises Development Fund for women entrepreneurs would boost the development of the sub-sector. The apex bank said that 2% of the wholesale component of the fund would be allotted to economically active persons that are living with disabilities, as 10% is meant for start-up businesses.

This disclosure came via the guidelines the apex bank issued for micro, small and medium enterprises development fund for non-interest financial institutions.


Recall that last June, the Federal Government of Nigeria had announced it would roll out palliatives to assist women-owned medium and small businesses (MSMEs) 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.”

The sub-sector is characterised by a huge financing gap, which hinders the development of MSMEs.

“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 fulfill the provisions of section 4.2 (iv) of the policy, which stipulates that women’s access to financial services should increase by at least 15% annually to eliminate gender disparity, 60% of the Fund has been earmarked for providing financial services to women.”

It added that this informed the decision of the CBN to establish the MSMEDF, which has a take-off seed capital of N220bn.  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.

Beyond the apex bank’s efforts, society must change its attitude to women. There is also a need for obsolete cultural practices which are skewed against women entrepreneurship to change.

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