To accelerate the implementation of SDG’s in Nigeria President Mohammadu Buhari created economic structures to facilitate investments and contribute to job creation for women including the Central Bank of Nigeria (CBN) credit facility. In this report, ENE OSANG examines how women have benefitted from these loans.
Over time, many Nigeria women are holding their own as business owners, however, many women-owned businesses still struggle with access to various incentives and are therefore situated at the micro levels within the informal sector.
The CBN micro credit loans is said to be targeted at small businesses hence its relatively low interest rates and favourable terms. However, other hurdles associated with getting the loan has made not a few women wonder if accessing it could ever be a reality.
NIRSAL Microfinance Bank (NMFB), which is the downstream partner bank, even before the outbreak of the coronavirus (COVID-19) pandemic had left several applicants frustrated.
According to its website, NIRSAL MFB was incorporated as a Private Limited Company in 2019 and commenced operations following license by the CBN to operate as a national microfinance bank.
Our correspondent reports that the many hurdles potential beneficiaries have to cross in order to access loans have over stressed them to the point that the loans have been termed in some quarters as “audio money.”
With the COVID-19 pandemic taking a massive toll on businesses and households the NIRSAL MFB is being saddled with the responsibility of disbursing intervention funds. NIRSAL MFB’s atrocious record in the disbursement of the intervention funds would be gleaned from its handling of the Agric Small and Medium Enterprise Scheme (AGSMEIS).
AGSMEIS is an ongoing scheme through which the apex bank is working towards providing loans to grow businesses in the country.
The AGSMEIS is a voluntary initiative of the bankers’ committee approved at its 331st meeting held on February 9, 2017. The scheme requires all banks in Nigeria to set aside five per cent of their profit after tax (PAT) annually to support the Federal Government’s efforts and policy measures for the promotion of agricultural businesses and SMEs as vehicles for sustainable economic development and employment generation.
Accessing the loans
For women, young entrepreneurs, and others who intend to sail into the world of business the low interest credit from schemes like AGSMEIS present veritable opportunities to realise their dreams.
With the CBN AGSMEIS Loan for instance, a budding entrepreneur with a smart business idea is supposed to be able access up to N10 million at five per cent interest per annum, without collateral. However, the disbursement appears to make the process complicated as more women continue to lament endless wait to access the funds.
Applicants have to go through a compulsory training by an Entrepreneur Development Institute (EDI), which is not a bad thing in itself. However, applicants are told to bear the cost of the training even without guarantee that they would get the loans.
The fixation on collection of training fees by the EDI has created an industry fleecing of already impoverished loan applicants, who afterwards have to wait endlessly for NIRSAL MFB loans, which may never materialise.
The many hurdles
In a bid to get firsthand experience our correspondent had tried applying for the loan but was bombarded with several invitations for EDI trainings which read in part: “Dear loan applicant, thank you for your interest in CBN AGSMEIS LOAN. The CBN AGSMEIS Loan training is scheduled to hold as follows: Date: March 2, 2020, Time: 9am – 1pm daily, Venue: Mallam Adamu Bello Auditorium, Agricultural Research Institute of Nigeria, Mabushi, Abuja. Pls, pay N10,000 as training fee to Nigerian Youth Chamber of Commerce. GTB 0200604869 to reserve your seat.”
Another invitation among several others sent to this reporter reads: “Did you miss the CBN AGMEIS Loan training? If yes, the training is still on. Date: Monday, March 16 -20, 2020, at Agricultural Research House, Mabushi, Abuja.
Such requests for payment for the training before loan application have led to several altercations between applicants and the respective institutions and may have led to loss of confidence in the process.
Training doesn’t guaranteed loan
Sharing her experience with our correspondent Mrs. Linda James a rice farmer and member of the Association of Women in Trade and Agriculture (AWITA) said she applied for the loan to acquire land for rice farming because land had been her constraint due to huge rent on the current land she was cultivating.
All though Linda had crossed the first hurdle of going through the training, she has continued to wait endlessly for the loan itself.
She said, “I was privileged to be part of an all expenses paid 7-day training organised by the Ministry of Agriculture for Women in December 2019. I know that to qualify me for the CBN loan, one has to go through the training. I am still waiting the processing and hopeful of getting it soon.
“I need this loan because I pay over 200,000 yearly for a six hectares farm land which I cultivate. The profitability of my farming therefore depends on a good harvest. Sometimes, the land can give me 30 bags of 150kg and more. I want to expand the business and I need to own my own land to be able to do that.”
She regretted the fact that in the last five years she had been farming rice and her business was growing gradually but her greatest challenge was land ownership.
“I rent the farm land I currently use for my rice farm and each year we are at the mercy of the land owners. I want to own a land of my own because it is safer and more lucrative. “Another thing I fear is that the land owner may decide not to rent out the land next year or may decide to give it to a higher bidder.”
Speaking further she said, “The training (by the EDI) only qualifies one to apply for the loan; when you apply you write your business proposal and that is what determines how much you will get. There are steps to writing the business proposal.
“The Microfinance banks are handling that now because it has been shifted to them by the CBN. I think this loan would be beneficial to women in agriculture if the money is released to us on time because the business of rice farming requires a lot of money.”
Loans should be in categories
Another member of AWITA, Lynn Olisa expressed concerns about the loan amount, saying there should be lower loan amounts to make it more inclusive.
She said: “The loan amount is too high and that is why the process of receiving it is difficult and discouraging. With the amount being given only a few women can access it.”
She also faulted the practice where NIRSAL MFB, which is supposed to disburse the loans, uses training paid for by applicants as a prerequisite for accepting applications, noting that that such demands further puts burden on the women.
“I am an agriculturist and I know loans are available but the same amount is what is given to everybody. I think the loans for women should be in different categories and there should be more opportunities for women to access funding.
“In the case of this loan, when you indicate interest, you are directed to go for a particular course which will cost you about 25,000. And after paying and attending, that doesn’t even guarantee you will get the loan. That kind of system is not encouraging.
“I know some members of AWITA were opportune to be part of free training last December but what about many other women out there who don’t have such opportunities,” she queried.
She further asserted that a lot of women were working hard to put food on the table of their families and as such should not be asked to pay such amount for training before being short listed to apply for the loans.
Emphasis on training fee discouraging
Similarly, an Abuja based entrepreneur Hauwa Gimba lamented the difficulty in getting the CBN loan, even after paying N25,000 for the training and submitting an application as well as business proposal.
“When I heard of the loan opportunity I applied but I was asked to go for the training, for which paid N25,000. Despite all these, I have not been given the loan. My only consolation now is that at least I learnt the process of writing a business proposal,” she said.
The entrepreneur called for the scrapping of the training fees, and creation of a time frame for accessing the loan. She said women have many business ideas but the lack of funding has remained the major obstacle.
Blueprint Weekend gathered that despite not releasing funds to loan applicants, the NIRSAL is much more interested in pushing applicants to EDI to conduct endless trainings through which applicants are made to part with fees ranging from N10,000 to N25, 000.
Absence of data on beneficiaries
An email to NIRSAL Microfinance Bank, over a month ago, for data on the number of successful loan applicants, especially women, has not been replied to, even as a visit to its website, www.nmfb.com.ng yielded no useful information about numbers of beneficiaries or reports of any impact assessment.
There are only 72 pictures posted in the photo gallery on December 13, 2019, showing some ‘beneficiaries’ without names or location smiling into the camera.
CBN keep mom
In her effort to get details of women beneficiaries of the CBN loans this reporter called the CBN Director, Corporate Communications, Isaac Okorafor, and was directed to the Head, Media, Mr. Lekan Ajayi, who promised to assist but refused to pick his calls afterwards.
The apex bank recently said it was disbursing N50 billion through the NIRSAL Microfinance Bank towards providing relief to the impact of COVID-19 pandemic on the economy, however, questions have been raised on whether the women who had been ‘forced’ to undergone the EDI training would be given preferential considerations.
This is as concerns continue to mount that the CBN’s laudable intentions through its various development finance initiatives may be headed for the rocks without serious oversight of the banks saddled with the disbursements, especially at a time the coronavirus is ravaging the Nigerian economy.