Micro Credit Fund: CBN Issues Guidelines To States
Posted by admin on Dec 24th, 2009 and filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry
The Central Bank of Nigeria (CBN) has issued guidelines to state governments on how they may access monies held by its micro credit fund.
The Micro Credit Fund (MCF) was established in 2008 by the federal government in conjunction with the CBN. It represents the national governments effort to securely eradicate poverty through empowering the micro finance sector, such that they give money to the financially needy.
The scheme, CBN said was to implement several layers of bureaucracy in order to ensure a secured channel by which micro enterprises may ultimately access
monies from MCF.
Stating the process of accessing the fund, the CBN said, government at state level must first set up a separate account with a commercial bank which is intended to hold the monies received from MCF.
The money set aside by the state governments, according to CBN is called ‘counterpart fund.’ This would later serve as opportunities to access the MCF. The account, it said is then used by state governments in partnership with MFBs to disburse loans to micro enterprises that fit within the parameters of the MCF objectives.
Once disbursed, the apex bank stated that it is the responsibility of state governments to establish a mechanism to monitor and supervise the repayment of the loans and, out of the repaid proceeds, pay back to the fund a percentage of the returns.
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