The Central Bank of Nigeria (CBN) has released new guidelines for the operation of its tertiary institutions entrepreneurship scheme (TIES).
The aim is to provide an innovative financing model that will create jobs, enhance the entrepreneurial ecosystem and support economic growth and development, the apex bank said.
The scheme was introduced as part of measures to address rising youth unemployment and underemployment in partnership with Nigerian polytechnics and universities to harness the potential of graduate entrepreneurs (gradpreneurs) in Nigeria.
The broad objective of the scheme is to enhance access to finance by undergraduates and graduates of polytechnics and universities in Nigeria with innovative entrepreneurial and technological ideas.
In the new guidelines released yesterday by the bank, it stated that the scheme is 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.
Activities covered under the scheme include innovative start-ups and existing businesses owned by graduates of Nigerian polytechnics and universities. The bank said priority will be given to innovative entrepreneurial activities with high potentials for export, job creation and transformational impact.
The take-off capital will be sourced from both the agribusiness /small and medium enterprise investment scheme (AgSMEIS), the circular said.
The programme will focus on agribusiness, information technology, creative industry and science and technology among other areas.
The scheme is designed to be implemented through three components – term loan component; equity investment component and developmental component.
The facility will have a 5 per cent interest rate per annum (9 per cent effective from March 1, 2022 or as may be prescribed by the CBN) with a maximum of 12 months moratorium on principal and interest.
Prospective applicants are expected to attend mandatory entrepreneurship trainings with their respective Nigerian polytechnics and universities and certificates of completion issued to trainees.
“Interest payment and principal repayment shall be made on monthly or quarterly basis by the obligor depending on the established cash flow cycle and in line with the approved repayment schedule,” the CBN said in the circular that was released yesterday.
According to the bank, the equity investment component would be in the form of injection of fresh capital for start-ups, expansion of established businesses or reviving of ailing entrepreneurial businesses.