By Odunewu Segun
In the revised guidelines released by the Central Bank of Nigeria, banks can now accept educational qualification certificates as collateral to assess the N220 billion Micro Small and Medium Enterprises Development Fund (MSMEDF) for start-up businesses.
The revised guideline realised by the apex bank states that for loans granted to start-up businesses by deposit money banks and development finance institutions will have as collateral “educational certificates such as SSCE, National Diploma (ND), National Certificate of Education (NCE), National Business and Technical Examination Board (NABTEB), Higher National Diploma (HND), University degree (NYSC Certificate where applicable) and a guarantor. “
The guideline also states that for the start-ups to access the MSMEDF they must present their Bank Verification Number (BVN) while “Venture Capital Firms (VCFs) that wish to finance start-ups in form of equity participation shall be eligible to access the MSMEDF at two per cent for investment in start-up projects. The collateral for such facility to the VCF shall be bank guarantee.”
The N220 billion MSMEDF was initiated by the CBN in 2013 to address the financing gap in the MSME sector, with 60 per cent of cent of cent of fund targeted at women entrepreneurs. MSMEs can access the fund with an interest as low as nine per cert.