CBN, Lagos unveil cheap loans for graduates

FG won’t borrow to finance recurrent expenditure — MINISTER

The Central Bank of Nigeria, CBN and the Lagos State Government yesterday unveiled special funds to be disbursed as cheap loans to graduates.

While the Lagos State Government unveiled a N25 billion  Employment Trust Fund for on-lending to graduates at three percent interest rate,  the CBN said it would soon release details of a special fund for on-lending to one million graduates at concessionary interest rate.



The funds were announced at the opening ceremony of the 7th Annual Bankers Committee retreat held yesterday  in Lagos, with the theme, Creating an Enabling Environment for SME Growth.

Governor of Lagos State, Mr. Akinwunmi Ambode, announced the N25 billion Employment Trust Fund, saying, “It would be difficult, if not impossible to achieve growth in  our economy if we do not give proper attention to adequate financing of SMEs.

“The Lagos State government is mindful of these challenges and we are taking steps to support young entrepreneurs to create wealth and generate employment. We would soon complete the legislative process of inaugurating our Employment Trust Fund, through which our youths and entrepreneurs, particularly in the social enterprise sector, would be supported with start-up funds.


Emefiele CBN Governor
“As a government, we are committing N25 billion in the next three years to this Employment Trust Fund. This is going to be more like an intervention fund for which we believe the interest we are going to charge will not be more than three per cent. This is to checkmate the negative effect of the growing youth population in Lagos.’’

Speaking on the proposed fund for lending to graduates, CBN Governor, Mr. Godwin Emefiele said, “In 2016, the CBN is contemplating a programme that would support SMEs at concessionary pricing to our young graduates.  We need to get more people to be employed. The central bank would over the next few weeks work out the initiative to create employment for at least one million graduates in Nigeria in 2016. That would entail the support from Nigerian banks and our development partners.’’

Also speaking at the retreat, the Minister of Finance, Mrs. Kemi Adeosun assured the banking executives that while the federal government will borrow to stimulate the economy, it would not borrow to finance recurrent expenditure but to finance capital expenditure.

She said, “Our debt-to-GDP ratio is low, and that gives us some space to try and run and deficit budget. But we need to do some fiscal house-keeping an there are some initiatives we have already rolled out. We need to borrow in order to stimulate the economy. But the significant challenge we have to do with recurrent expenditure. If you look at recurrent it is high. So if we continue in that trajectory every penny we borrow would go to recurrent.”


Source:  Vanguard