‘LSETF N25 billion fund as catalyst for entrepreneurship’

The N25 billion fund scheme of the Lagos State Employment Trust Fund (LSETF) established by the state government was scripted to empower Small and Medium Enterprises (SMEs) and improve the skills of entrepreneurs, with a view to serving Lagos residents and create a thriving small businesses’ economy.
 
Specifically, the Fund was established under the Lagos State Employment Trust Fund Law 2016 to serve as an instrument to inspire the creative and innovative energies of all Lagos residents and reduce unemployment across the state.
 
It has the mandate to directly invest N25 billion in helping Lagos residents grow and scale up their Micro Small and Medium Enterprises (MSMEs) or acquire skills to get better jobs.

Already, the Fund is set to raise additional N25 billion from international subscriber agencies to boost its programme of small business and grassroot funding. This will bring the total amount in the Fund’s management to N50 billion, having received a take off funding of N25 billion last year.
 
The Executive Secretary, LSETF, Akin Oyebode, said the Fund will focus on promoting entrepreneurship by improving access to finance, strengthening the institutional capacity of MSMEs and formulating policies designed to improve the business environment in the state.
 
“We have a set target of providing financial support to over 100,000 MSMEs since the introduction of the programme to support the creation of 300,000 direct and 600,000 indirect jobs; and add over 200,000 new taxpayers to the tax register,” he said.
 
Speaking in an interview with The Guardian on the development, one of the beneficiaries- Atere Raphael, who is a entrepreneur that owned Raphgate Chemical Nigeria Limited, the producer of Horse Paints based in Lagos, he said he got N5 million, which has helped him to turn his business around and able to have several distribution centres across the country.
 
According to him, the programme has helped his company to have presence in many parts of the country with more workers.
 
Also speaking concerning the development on how she got N2.5 million from the fund, Yusuff Gift, of Sunflower gardens, said LSETF loan is more better than the commercial banks in terms of high interest rates placed by banks.

The only required rate for LSETF is five per cent of all total money given not monthly 5 per cent collected by commercial banks in the country, adding that the loan has actually helped her company achieved more goals.

Oyebode said to ensure the sustainability of the Fund, LSTEF will aim at raising a minimum of N25 billion from domestic and international donors, in addition to N25 billion committed by the state government.

“Our interventions will provide loans to micro, small and medium enterprises at single digit interest rates per annum; we will also provide training and capacity building support to the business we finance, giving them the necessary technical support to drive growth and job creation,” he said.
 
In January, 705 entrepreneurs emerged the first set of beneficiaries of the LSETF loan scheme, designed for enterprise development and driving productivity for the Nigerian economy.

The Lagos State Governor, Akinwunmi Ambode, had said that the first batch of the beneficiaries will access about N1 billion in financing with a low interest rate of five percent, which was favourable than what the financial institutions were offering in the country.

He charged them to use the funds judiciously, by providing effective services, creating more jobs and focusing on innovative solutions for the economy, becoming economic agents of transformation.
 
According to the LSETF executive secretary, “the businesses we support must demonstrate capacity to repay our loans; be owned by Lagos residents duly registered by the Lagos State Residents Registration Agency (LASRRA); show evidence of tax payments to the Lagos Inland Revenue Service (LIRS); and have valid Bank Verification Numbers (BVNs).”

In addition to our MSME financing schemes, LSTEF will also train unemployed residents to either take up identified jobs or run their businesses.
 
Beneficiaries can access maximum loan of N500,000 at an interest rate of five per cent per annum, to be spread over 12 months. Under this category, the applicant’s business must be the main source of livelihood and he/she must also demonstrate existence of a verifiable and economically stable market for goods and services.
 
The business must have a minimum turnover of N20,000 monthly and in cases where applicant is unbanked, turnover can be estimated using price of applicant’s service and walk in or buying rate.
 
The business should have been operational for at least one year otherwise the applicant should have a certification in a trade and reference from the certifying body.

Maximum loan obtainable is N5,000,000 in the case of an SME, and must be for asset acquisition and/or working capital for the business at an interest rate of five per cent per annum, payable over 36 months.
 
The business must be located in Lagos; registered with the CAC; must be registered with the LIRS and must be in existence for more than 12 months.