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A Lagos Development Economist, Dr Leonard Dakoru, has hailed the recent effort of the Central Bank of Nigeria (CBN) in the flotation of Creative Industry Financing Initiative (CIFI) funding scheme for SMEs and start-ups.
The scheme which is designed to allow fashion, Information Technology, movie production, movie distribution, music and software engineering student to access loans up to N500m is coming from a new partnership between the apex bank and the Bankers’ Committee as part of efforts to boost job creation in Nigeria.
Giving further insights in an interview, Dr Dakoru scored CBN high in coming up with the scheme, saying “I think the CBN did what it did because it has come to its senses that no commercial bank is truly ready to give out loans at a single digit interest rate”.
“Again, what the new scheme means is that the CBN cannot really convince banks on the multiplier effects of giving single interest rate loans to SMEs and start-ups.
“This is the reason why I always say that banks in Nigeria are not doing what they should be doing which is business facilitation rather they are competing amongst themselves on who posts the highest profit after tax in every quarter.
However, he said “The idea of working with Bankers’ Committee to always float a development fund access may not pass the test of time because at the back end, the same banks will sabotage the scheme so as to still drag the loan applicants to their high interest rate slaughter house”.
Continuing, Dr Dakoru argued that the scheme will be short-lived because the partnering banks will after a while smuggle in hard conditions to discourage the survival of the CIFI so that SMEs and start-ups will be forced back to their hostile lending processes.
Details of the new scheme showed that under the CIFI loan initiative, beneficiaries could get up to N500m loans at nine per cent interest rate.
CBN also revealed that the creative industries that could apply include fashion, Information Technology, movie production, movie distribution, music and software engineering student loan. It also said “Software engineering student can get a loan of up to N3m, N30m for movie production business, N500m for movie distribution business, cover your rental/service fees for fashion and Information Technology business, cover your training fees, equipment fees, and rental/service fees for music business.”
However, CBN advised interested applicants in the creative industry to submit applications to their banks for approval and disbursement and urged them to prepare their business plan or statement on how much they required for the business and why.
The applying customers’ bank will rely on the terms and conditions provided by the CBN/Bankers’ Committee Regulations to either approve or decline after going through the applicants proposal.
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