THE Lagos State Employment Trust Fund (LSETF) has so far approved up to N1.7 billion loans for 1,400 beneficiaries who are at different stages of fulfilling requirements for disbursement.
LSETF is an initiative of the Lagos State government to invest N25 billion over four years to empower Lagosians engaged in micro, small and medium enterprises (MSMEs) and boost job creation in the state by granting loans at 5 percent per annum.
Executive Secretary, LSETF, Mr. Akintunde Oyebode, disclosed during an interactive session with the media, in Lagos, that the target is to have disbursed loans to at least 100,000 businesses creating up to 1 million jobs by 2019. “As at today, we have so far approved up to N1.7 billion to 1,400 beneficiaries. Those beneficiaries are at different stages of fulfilling the requirements for the disbursement. But we expect that by the time we are reviewing this strategic funding in 2019, our target is to have disbursed loans to at least 100,000 businesses and all our programmes should translate into creation of 1 million jobs,” he stated.
Oyebode further stated: “Our mandate is very clear, on one side is to provide financial support to micro small and medium scale enterprises.
Biggest incentives to investment
Not just financial support but also provide some capacity support that allows these businesses to run effectively and grow and thereby creating jobs across Lagos State. It also helps improve the skill level of our residents. We’ve identified that one of the biggest incentives to investment is the availability of a skilled and competent workforce. It also improves the business environment across Lagos, to identify policy bottle necks and recommend solutions that improve the overall ease of doing business in Lagos State.
“The scheme is not like traditional lending. We do not require collateral; we only require that you provide the relevant documentations that you are a fit and proper person to borrow. And even the banks in recognition of this have said to us there are people that we know who run genuine businesses who cannot get loans from us, can we refer them to you and we say of course you can. This is a sign that even the banking industry realizes that we are doing it in a way that even they can’t do it.
The hallmark of this scheme is that we are solving two problems – access to capital and cost of capital. We’ve identified the second one as providing single digit interest rate.
But the first one is that we are actually doing this without recourse to any form of collateral which is the biggest hurdle that small businesses face in accessing funding. What we are requiring is that the businesses provide the minimum documentations that guarantee us that you are indeed worthy of this facility.”
There are three programmes under the LSETF scheme: Micro-enterprise Start-up which offers up to N250,000 loan at an interest rate of 5 percent per annum for up to one year; Micro-enterprise loan, similar to the start-up programme, but offers loan amount up to N500,000 at the same rate and tenor and; SME loan programme offering between N500,000 and N5 million for a period of up to 3 years at an interest rate of 5 percent per annum. The three programmes have different requirements for beneficiaries to qualify.