Disbursement of funds for the Agri-Business, Small and Medium Enterprises Investment Scheme (AGSMEIS), an initiative of the Bankers' Committee has commenced.
The scheme was formally approved at the committee's 331st meeting held in February this year.
The initiative is to support the federal government's efforts and policy measures for the promotion of agricultural business and small and medium enterprises (SMEs) as vehicle for sustainable economic development and employment generation.
The mode of operation of the initiative released by the CBN indicates that the scheme requires all banks in Nigeria to set aside five per cent of their profit after tax annually for equity investment in Agri-business and SMEs, which has so far garnered the sum of N26.87 billion from 21 banks to be invested in projects approved by the Board of Directors of the scheme.
According to a statement wednesday, the activities to benefit from the scheme include agricultural investments, such as production, storage, processing, logistics and marketing.
While SMEs in the real and services sectors which are backward integrated into manufacturing, agriculture, mining and modular refineries would benefit from the scheme.
Also included are technological endeavours such as local initiatives in information and communication technology (ICT) and any other activities as may be determined by the Bankers; Committee from time to time.
This new initiative targeted at start-ups and expansion of established companies or reviving of ailing companies is expected to further enhance job creation and agri-business towards sustainable economy.
The scheme, which set maximum investment in a single project to the tune of N2 billion, shall be operated for a period of 10 years (not exceeding 2027) in the first instance subject to review after five years of its operations.
"Also, there shall be an initial 3-year lock up period before exit in order to encourage value creation and boost managerial capacity of the SMEs unless there is a material adverse event.
"However, a special purpose Vehicle (SPV) named Bankers' Fund Managers Limited, shall manage the scheme, while the Board of Directors monitors the implementation of the scheme.
"In the interim, a Project Review Committee (PRC) with membership comprising seven deposit money banks had been constituted to perform the function of the SPV. The PRC was inaugurated on August 17, 2017," the statement added.