The Central Bank of Nigeria has launched the Tertiary Institutions Entrepreneurship Scheme (TIES) designed to grant financial support to undergraduates and graduates with entrepreneurial skills.
The Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, launched the TIES initiative in Abuja yesterday.
The scheme is another intervention of the CBN aimed at addressing the dual challenge of youth unemployment and underemployment in Nigeria.
What the CBN is saying
Given his speech during the event, Emefiele said that it had become important for governments to put in place policy measures to support entrepreneurial development among our youth, hence the need for the scheme.
He said, “With about 600,000 students graduating yearly from Nigerian tertiary institutions, and without the commensurate employment opportunities in both the public and private sectors, it has become imperative that government, at all levels, puts in place policy measures to support entrepreneurial development among our youth.
“Such measures would create an enabling business ecosystem that supports innovation and enables the youth to unleash their entrepreneurial potential, by redirecting their focus from seeking white-collar jobs to a culture of entrepreneurship development.
“The ecosystem should provide support in re-orientating, training, and providing a financing model apt to the peculiarity of the sector within which the businesses operate.”
The program, which was established in collaboration with Nigerian polytechnics and universities, aims to unlock the potential of graduate entrepreneurs by shifting their focus away from white-collar occupations, towards entrepreneurship as a means of economic development and job creation.
The CB governor stated that, in light of the dearth of suitable employment prospects, it has become critical for governments at all levels to implement policy measures to assist youth entrepreneurial growth. TIES, according to the governor, would create an enabling business climate that encourages innovation and allows young people to realize their entrepreneurial potential.
3 verticals of the scheme
According to the apex bank, the scheme was designed to address three (3) verticals of the segment, and these are:
i. The Term Loan Component – provides direct credit opportunities to graduates of Nigerian polytechnics and universities of not more than seven years post-graduation.
An applicant, if successful, shall be eligible for a maximum of N5 million for an individual, sole-proprietorship or small company; and a maximum of N25 million for a partnership or company. The tenor for the facility is maximum of five (5) years, with a one-year moratorium, and at an interest of 5% per annum, which shall revert to 9% from March 2022. The pilot phase of the Scheme is presently being implemented through the Bank of Industry (BOI) with the development of an application portal and processing of submitted applications.
ii. The Equity Investment Component – is designed to support start-ups, existing businesses requiring expansion, and ailing businesses seeking resuscitation. The Component shall be implemented under the Bank’s AgSMEIS Equity Window. Thus, the investment limit shall be subject to the limit prescribed by the AGSMEIS Guidelines and the investment period not more than ten (10) years.
iii. The Developmental Grant Component – is aimed at raising awareness and visibility of entrepreneurship among undergraduates of Nigerian tertiary institutions.
Here, polytechnics and universities in Nigeria shall compete in a national biennial entrepreneurship competition where undergraduates are presented by the tertiary institutions to pitch innovative entrepreneurial or technological ideas with transformational potential.
Three (3) top institutions at the regional levels shall proceed to the national level, where the top five (5) shall be awarded grants ranging between N120 million and N250 million.
In his concluding remarks, Emefiele said that with the lunch of the scheme, and other programmes such as this, the higher institutions will not only be ready and able to provide real solutions to the various challenges emanating from their immediate environment and even beyond, but who can compete favourably with their counterparts around the world.