Accessing The New CBN AGSMEIS And MSMEDF Agric Funding

The Central Bank of Nigeria (CBN) on Tuesday, unveiled the agric funding guidelines for the operations of the Agri-Business, Small and Medium Enterprises Investment Scheme (AGSMEIS), and Micro, Small and Medium Enterprises Development Fund (MSMEDF) for Non-Interest Financial Institutions (NIFIs).

Also, seven other intervention schemes and Accelerated Agricultural Development Scheme (AADS) were included in its guideline bouquet. 

What To Know About The AGSMEIS Fundings

Businesses and industries that are eligible for the funds, cut across the agricultural value chain, covering production, logistics and marketing, inputs supply, storage, and processing. 

MSMEs in the real sector including manufacturing, mining, and petrochemicals.

MSMEs in the service sector including Information and Communication Technology (ICT) and the creative industry.

The apex bank would create a Fund known as ‘AGSMEIS Non-Interest Fund’ that’ll be domiciled in a dedicated account with the Central Bank of Nigeria.

After the Annual General Meeting (AGM) of the participating bank, each Non-Interest Deposit Bank shall transfer its contribution to the CBN, on or before 10 working days.

Each Non-Interest Deposit Bank (full-fledged or window) shall set aside 5% of its profit after tax (PAT) annually as a contribution to the Fund.

Accessing The Fund

Entrepreneurs who intend to apply for the agric funding and other related funds, should, however, know that the application of the Fund will be categorized into three broad components. They are debt (50%), equity (45%), and developmental (5%) components. 

There is also, a financing limit of N10,000,000.00 and a 5% markup per annum, with a maximum of 18 months moratorium for principal and 6 months on the mark-up.

It will please you to know that, the debt component which constitutes 50% of the fund shall be disbursed as financings to eligible businesses through Non-Interest Deposit Money Banks.

Also, all assets purchased shall be registered with the National Collateral Registry (NCR). Furthermore, the tenor will be up to 7 years (depending on nature/gestation period of the project).

Documents Required For The Application. 

Some of the documents required for the agric funding application includes the following:

• Evidence of registration of business name or certificate of incorporation and filing of annual returns (where applicable) in compliance with the provisions of the Companies and Allied Matters Act (1990).
• Duly completed application form.
• Certificate of Training from recognized Entrepreneurship Development Institution (EDI) or evidence of membership of organized private sector association.
• Bank Verification Number (BVN).
• Letter of Introduction from any of the following: Clergy, Village Head, District Head, Traditional Ruler, senior civil servant, etc (for individuals, microenterprises only).

See Also: Benefits of business registration with the Corporate Affairs Commission (CAC).

Recall, that the Agri-Business, Small and Medium Enterprise Investment Scheme (AGSMEIS) (hereinafter called AGSMEIS or the Scheme) is an initiative of the Bankers’ Committee established at its 331st Meeting held on February 9, 2017.

The Scheme supports government’s policy measures and efforts for the promotion of agricultural businesses, micro, small and medium enterprises (MSMEs) as vehicles for sustainable economic development and employment generation.

The intervention programme that was unveiled by CBN, had a framework that was supposed to integrate a non-interest window aimed at supporting businesses and households that have been impacted negatively by the COVID-19 pandemic.

“The MSMEDF for NIFIs guidelines are aimed to channel low return funds to the MSME sub-sector of the Nigerian economy through participating Financial Institutions (PFIs) to enhance access by MSMEs to financial services.

“Similarly, the non-interest guidelines for the AADS are aimed at engaging a minimum of 370,000 youths in agricultural production across the country between now and 2023, in order to reduce unemployment among the youth in the country,” it added.

Some of The Major Objectives of The Scheme Includes The following: 

• Improve access to affordable and sustainable finance by Agri-businesses, Micro, Small, and Medium Enterprises (MSMEs). 
• Creating employment opportunities in Nigeria.
• Boost the managerial capacity of agri-businesses and MSMEs to grow the enterprises into large corporate organizations in line with the Federal Government’s agenda to develop the real sector, thereby promoting inclusive growth.

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