In 2019, the Federal Government introduced the Creative Industry Financing Initiative loan as a way to stimulate investment in the culture and creative sector. Four years after, creatives are still struggling to access the loan, GREGORY AUSTIN NWAKUNOR writes.

A few years ago, as part of efforts to boost the creative industry, particularly, its ability to create jobs for youths, the Central Bank of Nigeria (CBN), in collaboration with the Bankers’ Committee, introduced the Creative Industry Financing Initiative (CIFI) loan.

The initiative was launched with a large ambition. It was founded to take advantage of the potential of the industry.

In fact, when CBN eventually released information on how to access funds for their creativity, many thought it would be straight-forward and easy to access. It was considered a historic terminus for creative industry funding.

Access Bank stated that it made arrangements for consultants to assist its customers in preparing their business plans to meet the minimum standard at discounted rates.

While some of them made the form available manually, some simplified the application process designing a portal for submission of application online.

Buoyed by the CBN/Bankers Committee’s assurance that over N22 billion had been allocated to support the industry, as well as reduce unemployment, especially among the young, which was desperately high, practitioners in the industry hailed the idea.

Many argued that the initiative was an indication of government’s commitment to tackling menace of unemployment in the country.

It was assumed that CIFI would employ about 300,000 youths over the next five years and lead to the accumulation of foreign exchange. It was also believed that it would stimulate investment in the industry to the benefit of everybody.

Recall that the administration of President Muhammadu Buhari, hinging on government’s diversification policy, had seized various fora to persuade Nigerians on the need to jettison the oil sector and embrace agriculture or the creative industry owing to their capacity for massive job creation.

The theatre teacher and scholar, Dr. Sola Balogun of Federal University Oye-Ekiti, while commending the initiative, said it was a welcome development, provided the process was transparent.

He had told The Guardian, “this was a timely and enduring intervention that could rescue the creative sector and one that could transform the efforts of artists, writers, filmmakers, dramatists, painters, actors, producers, fashion designers, tour operators, batik makers, musicians, particularly, the upcoming and promising ones, decorators etc into profitable and employment generating ventures.”

He had, however, warned on the need for monitoring so that the initiative was not hijacked by ‘creative contractors’.

Creatives whose businesses fall within the focal sub-sectors of the eligible activities could get loans ranging from N3 million to N500 million, depending on their areas of business.

The interested creative was expected to approach any of the Participating Financial Institutions (PFIs) with a clear business plan or statement, detailing how much capital was needed to execute the drawn business proposal, and complete the loan application process in the manner prescribed by the chosen PFI. All commercial and microfinance banks, licensed by the CBN to operate in Nigeria, are PFIs.

Documentation requirements for accessing a loan under the CIFI were to be determined by each PFI, in line with its internal processes for customer credit requests.

Where a PFI finds an applicant successful after conducting due diligence of the application and documents submitted, it would issue such applicant an offer letter containing the terms of the loan agreement, including repayment schedule.

Afterwards, the PFI is required to forward the successful application with the offer letter to the CBN for consideration.

Upon a satisfactory evaluation of the process, the aggregate facility amount shall be released by the CBN to the PFI for on-lending to the successful applicant.

However, the framework does not specify applicable SOL for loans relating to other eligible sub-sectors, such as fashion, IT and music industries.

The stipulated funding structure for financing successful applicants’ projects is made up of Minimum Equity Contribution (MEC) and Term Loan.

While eligible movie industry loans require 30 per cent MEC (by borrowers) and 70 per cent Term Loan (from the banks), loans relating to eligible activities in the fashion, IT and music industries require 20 per cent MEC and 80 per cent Term Loan, appropriately.

However, a borrower is required to deposit, with the PFI, certificates of his/her university degree and National Youth Service Corp (NYSC) in lieu of debenture and mortgage deeds.

But as things stand, the initiative has become a farce, people who the facility is meant for have not been able to access it.

According to the cinema critic and head of the Africa Movie Academy Awards (AMAA) jury, Shaibu Hussein, “the guidelines are stringent.”

He said: “They are not what an ordinary or independent creative can access so easily.”

Hussein added it is not about a creative making a couple of movies, or artistes producing some songs, “you need to be established as a company to get the loan.”

He likened it to the tax holiday, which the former Minister of Information and Culture got for the creative industry at one time, which they did not enjoy.

The threshold to get that tax holiday is to have business in the range of N500 million and N1 billion. It is not for people doing N10 and N20 million business. “You must have a well established structure,” he said.

A fashion designer, Yusuf  Bello, who runs a fashion house in Idimu, Lagos, said  government did not have the youth in mind when they came up with this initiative.

A closer look at the eligibility requirements, you must have a business plan that shows a detailed value proposition. It must clearly point out your target market, your distribution process, income statement and your projections; three years audited accounts for established companies or statement of affairs for startups and companies with less than three years of existence, copies of duly executed offer documents between the bank and loan applicants and Certificate of Incorporation (You must be legally registered under CAC as a business name or company).

“How do they expect me to meet their requirements?” Bello asked.

The young man who started his fashion business four years ago said he is still running a small scale business and so cannot meet up with requirements.

Another fashion designer, Nkem Ojukwu, who lives Ikotun, also frowned at the requirement for this loan. She said, “the conditions are too stringent. They are just discouraging young people from going into business.”

Only recently, the team of Ohunalumani Nigeria Limited wrote an open letter to the President complaining of an unequal access to the facility.

In the letter titled, ‘Inability of Creative Entrepreneurs to Access the Creative Industry Finance Initiative’, the company said, “despite the commendable launch of Creative Industry Finance Initiative (CIFI) by the Central Bank of Nigeria, numerous creative entrepreneurs have been unable to access the promised financial support, hindering their ability to contribute to the growth and development of the creative industry.”

In the petition signed by Akintunde Boboye, he acknowledged government’s recognition of the creative industry’s vital role in fostering economic growth, job creation, and cultural enrichment.

The petition said CIFI held great promise in providing much-needed funding to creative entrepreneurs, who have been striving to unleash their artistic potential and contribute to the nation’s prosperity.

“However, it is disheartening to note that many deserving creative entrepreneurs have encountered significant obstacles when attempting to access the financial support offered by the initiative. The challenges they face include, bureaucratic red tape, lack of transparency in the application process, and a prolonged waiting period for approval.

“The creative industry in Nigeria is teeming with immense talent and potential. It encompasses various sectors such as film, music, fashion, art, design, and literature, among others. These sectors have the power to showcase our rich cultural heritage, foster tourism, attract foreign investment, and provide employment opportunities for our youth,” the statement said. “By addressing the obstacles hindering creative entrepreneurs’ access to CIFI, we can unlock the industry’s full potential and harness its enormous socio-economic benefits.”

The Coalition of Nigerian Entertainers had also decried the inability of its members to access the creative industry loans.

The Coalition, led by Amb. Kenule Nwiya, registered their displeasure over the manner in which the CBN has built a wall against the creative industry practitioners.

“We are aware of the loan that is being coordinated by the CBN. We have been unable to access it. So, we decided to come, pay our respects and hold discussions with stakeholders and see how to resolve the issue.’ ’

Nwiya said: “We have observed the ease with which the agricultural loan and other loans are being accessed but the creative industry loan has not been accessed.”

However, the movie producer and chief executive of Royal Roots, Gregory Odutayo, said the challenge many creatives have is that they still think of it as grant.

“Most of us creative people believe in grants. We don’t believe in loans. The days of grant in Nollywood is gone,” he remarked.

He added: “A lot of people collected grant during Jonathan, but didn’t execute the projects they got grants for. Those who got grant for film production, training facilities and infrastructure development went away with it.”

Stakeholders in the creative sector have called for a reform of the process to give more people access to the loan.

They noted that of what use is it when such a huge amount is locked up in bank vault without anyone having access.

While requesting the president’s intervention to rectify these issues and ensuring that the Creative Industry Finance Initiative fulfills its intended purpose of empowering the creative community.

Boboye said: “Your decisive action will not only benefit individual entrepreneurs but will also contribute to the overall growth and development of our great nation.”

While urging government to restructure the facility, Hussein called on government to simplify and streamline the procedures involved in accessing the Creative Industry Finance Initiative, reducing unnecessary bureaucracy and ensuring clarity for applicant.

To address the challenges faced by creative entrepreneurs in accessing the loans, Boboye called on government to “enhance transparency and accountability: Establish a transparent and easily accessible platform where applicants can track the progress of their applications, receive updates, and provide feedback on their experiences.

He also raised the need to “increase awareness and support.”

He also stressed the need to “encourage partnerships between established industry professionals and aspiring creative entrepreneurs, facilitating knowledge sharing, mentorship programmes, and access to networks that can enhance the viability and sustainability of their projects.”