CBN is attempting to make its startup fund to be more accessible
The Nigerian government through the Central Bank of Nigeria (CBN) has decided to make its NGN220 billion fund initiative for startups to be accessible.
According to the Governor of the apex bank, only 30% of the N220 billion Micro Small and Medium Enterprises Development Fund had so far released because of the tough conditions startups must meet before accessing the fund.
To ensure that more startups access the fund, CBN has directed financial institutions across the country to accept applicants’ educational certificates as collateral.
According to the new guideline, loans granted to startup businesses by deposit money banks and development finance institutions will have as collateral “educational certificates such as Senior School Certificate (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.”
Entrepreneurs are also required to present their Bank Verification Number (BVN) while Venture Capital Firms (VCFs) that wish to finance startups in form of equity participation shall be eligible to access the MSMEDF at 2% for investment in startup projects. The collateral for such facility to the VCF shall be bank guarantee.