The Central Bank of Nigeria (CBN), recently launched the Tertiary Institutions Entrepreneurship Scheme (TIES), to provide access to finance bankable ideas by graduates and undergraduates, in the quest to tackle youth unemployment in the country.
The Scheme, developed in partnership with Nigerian polytechnics and universities, is designed to harness the potentials of graduate entrepreneurs by creating a paradigm shift from the pursuit of white-collar jobs to a culture of entrepreneurship for economic development and job creation.
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Speaking at the launch in Abuja, the CBN Governor, Mr Godwin Emefiele 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.”
Mr. Emefiele described entrepreneurship as an integral part of any economy, and that “entrepreneurs play a key role in driving growth and innovation, which in turn results in job creation.”
The TIES he explained would create an ecosystem that allowed the flow of affordable credit to the real sectors of the economy.
He said, “With an estimated population of 213 million, out of which two-third are youth, aged under 35 years, the nation is faced with a historic opportunity, particularly as the demography continues to create clear evidence of their relevance to economic development, as accentuated by the global recognition of Nigerian tech start-ups and continued growth of businesses in the technology space owned by the youth.
“In realization of this, the CBN has introduced several innovative financing programmes designed to extend low-cost financing to youth entrepreneurs across the country. These interventions have continued to receive resounding commendations, as they have proven effective in extending credit to youth entrepreneurs across the country.”
The scheme consisted of three segments: The Term Loan Component;The Equity Investment Component; The Developmental Grant Component.
The 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, is eligible for a maximum of ₦5 million for an individual, sole-proprietorship or small company; and a maximum of ₦25 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 cent per annum, which shall revert to 9 per cent from March 2022.
Mr. Abubakar Suleiman of Sterling Bank heads a Body of Experts which was inaugurated to access the proposals by applicants.
Who is eligible for TIES loan
Only those with a Nigerian polytechnic or university degree will be considered. Also, Priority will be given to innovative entrepreneurial activities with high potentials for export, job creation and transformational impact.
The following documents will confirm an applicant’s eligibility:First-degree certificate (BSc/HND/ or its equivalent), National Youth Service Certificate (NYSC) discharge or exemption certificate, Certificate of Participation issued by polytechnics and universities evidencing entrepreneurship training; and Not more than 7 years post-NYSC.
How undergraduates can apply
Undergraduates would be able to apply for grants through the scheme’s development component.
In a national biennial entrepreneurship competition, the Developmental Component would be distributed in the form of awards to Nigerian polytechnics and universities.
The competition aims to increase undergraduates’ awareness and visibility of high-impact entrepreneurial/technological concepts, foster entrepreneurial talent hunts in Nigerian polytechnics and universities, and encourage commercially viable and transformative technologies.
Interested Nigerian polytechnics and universities shall apply to participate in the national biennial entrepreneurship competition on a dedicated online portal (https://cbnties.com.ng), outlining brief details of the project, potential impact and evidence of originality of project;
How it works
For the biennial regional and national entrepreneurship competitions, the CBN would choose a Body of Experts (BoE) from the corporate and governmental sectors to assess entrepreneurial and technology innovations submitted by Nigerians.
The BoE will review the submitted applications through engagements that feature undergraduates competing by pitching entrepreneurial and technology innovations at regional levels, with finalists progressing to the national event for final consideration and ranking by the BoE.
The showcasing programs will be shown on channels such as social media and national television stations for four (4) weeks to assist showcase the benefits of entrepreneurship and influence attitudes and social perceptions about it.
On the recommendation of the BoE, the grant will be awarded to the top five (5) entrepreneurial and technological innovations at the national level; and the grant will be disbursed in 55:45 ratio tranches directly to a dedicated account opened for the grant by Nigerian polytechnics and universities, subject to approved milestones.
How graduates can apply
Graduates of Nigerian polytechnics and universities shall be eligible to participate under the Term Loan Component of TIES.
The Term Loan Component consists of two tires for individuals and companies
Tier 1/ Individual projects
The maximum loan amount in this category is N5.0 million, with a 5-year repayment period. The current interest rate on the loan is 5% per year, however, it will increase to 9% on March 1, 2022. In addition, the loan has a maximum 12-month moratorium on principal and interest.
Documentation Collateral Requirements:
The applicant shall apply as a business entity registered with the Corporate Affairs Commission (CAC) and certified true copies (CTC) of relevant forms submitted;
Others include Bank Verification Number (BVN); First-degree certificate (BSc/HND or its equivalent); National Youth Service Certificate (NYSC) discharge or exemption certificate; and Certificate of Participation issued by polytechnics and universities evidencing entrepreneurship training.
Collateral Requirements includes duly signed Global Standing Instruction (GSI); and third-party guarantee from a senior federal/state civil or public servant (not below level 10 and not having less than 5 years to retire from service), clergy of note and reputation or recognized traditional ruler.
Tier 2 – Partnership / Company projects
The loan limit for company projects is N25.0 million, with a 5-year term. The loan’s current interest rate is 5% per year, however, it will climb to 9% on March 1, 2022. In addition, the loan has a maximum 12-month principal and interest moratorium.
Documentation Collateral Requirements
The partnership or company shall apply as a registered business with the Corporate Affairs Commission (CAC) and certified true copies (CTC) of relevant forms submitted.
Each member of the partnership or company shall also submit: Bank Verification Number (BVN), First-degree certificate (BSc/HND or its equivalent), National Youth Service Certificate (NYSC) discharge or exemption certificate, Certificate of Participation issued by polytechnics and universities evidencing entrepreneurship training.
Collateral Requirements Requirements are duly signed Global Standing Instruction (GSI) by a member of the partnership or company; and third-party guarantee from a senior federal/state civil or public servant (not below level 10 and not having less than 5 years to retire from service), clergy of note and reputation or recognized traditional ruler.
Award of Grants
Five (5) top Nigerian polytechnics and universities with the best entrepreneurial pitches/ideas shall be awarded as follows: First place – N150.0 million; Second place – N120.0 million; Third place – N100.0 million; Fourth place – N80.0 million; and Fifth place – N50.0 million.
The grants shall be in the following areas: Agribusiness – production, processing, storage and logistics; Information technology – application/software development, business process outsourcing, robotics, data management; Creative industry – entertainment, artwork, publishing, culinary/event management, fashion, photography, beauty/cosmetics; Science and technology – medical innovation, robotics, ticketing systems, traffic systems, renewable energy, waste management; and any other activity as may be determined by the CBN from time to time.
The Scheme shall be operated for a period of 10 years in the first instance (not exceeding 31st December 2031) depending on the complexity of the project.
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