Nigeria Youth Investment Fund, explained
The Nigeria Youth Investment Fund is a N75 billion government initiative designed to boost the Nigerian economy through leverage and access to finance for young people between the ages of 18 and 35. The fund hopes to serve as a catalyst to unleash the potential of the youth and enable many of them to build businesses that will create jobs and improve the country’s ailing economy.
The scheme is part of the N2.3 trillion stimulus package the Nigerian Economic Sustainability Plan, Nigeria’s response to the economic devastation caused by the coronavirus pandemic.
Nigeria Youth Investment Fund (NYIF) is broadly divided into two main categories, N60 billion MSMEs Survival Fund and N15 billion Guaranteed off-take schemes.
The Guaranteed off-take scheme was developed by the Federal Ministry of Youth and Sports Development (FMYSD) as a built-in strategy to respond effectively to the youth employment challenge in Nigeria. The major objectives of the plan are to address the fragmentation of youth initiatives that prevent the assessment of impact and to provide Nigerian youth with investment inputs required to build successful businesses that can become sustainable employers of labor and contributors to Nigeria’s development.
Eligibility Criteria
Informal Business Enterprises (Individuals and Sole Proprietors)
A huge percentage of youth are engaged in the informal sector. Accordingly, the
NYIF will facilitate the transition of informal enterprises owned by youth into the
formal mainstream economy where they can be supported comprehensively, build
a bankable track record; and be accurately captured as active participants in
economic development. Eligible youth must fulfill the following conditions:
(i) Be a youth within the age bracket of 18-35 years.
(ii) Have business/enterprises domiciled and operational in Nigeria.
(iii) Has not been convicted of any financial crime in the last 10 years.
(v) Has a valid Bank Verification Number (BVN)
(vi) Possess Local Government Indigene Certificate.
Formal Business Enterprises (Youth Owned Enterprises)
These are enterprises that are legal entities duly registered with the Corporate
Affairs Commission (CAC).
Documents Required:
(i) Evidence of registration with the Corporate Affairs Commission (Certificate of
Incorporation and Form CAC 2A);
(ii) Business questionnaire;
(iii) List of Directors with BVN nos.;
(iv) Evidence of regulatory approvals (where applicable);
(v) Tax Identification Number (TIN).
Cooperative societies duly registered with the relevant government authorities and
members of Commodity Associations that fall within the eligible age bracket are
also eligible to participate.
Training
Applicants shall undergo a compulsory entrepreneurship training arranged or
approved by the Federal Ministry of Youth and Sports Development.
Eligible Activities/Businesses
Legally allowed activities in the sectors or focal areas listed below shall be eligible:
(i) Technology/ Innovation;
(ii) Agriculture and related value chain;
(iii) Green Economy and Renewable energy sector;
(iv) Manufacturing,
(v) Hospitality/Tourism;
(vi) Construction;
(vii) Logistics and supply chain;
(viii) Healthcare value chain,
(ix) Creative sector and
(x) Trading and Services.
(xi) Others as may be determined by NYIF/CBN from time to time.
However, preference shall be given to enterprises that will support the growth of
priority sectors, specifically those identified by the Economic and Recovery Growth
Plan ERGP and the Nigerian Youth Employment Action Plan.
Types of Facilities
Term Loan (for asset acquisition/improvement)
(i) Individual (Unregistered business)
Shall be determined based on the activity/nature of project subject to the
maximum of N250,000
(ii) Registered Businesses (Business name, Limited Liability, Cooperative,
Commodity Association shall be determined by the activity/nature of the project
subject to the maximum of N3.0 million (including working capital).
Note: Immovable assets acquired with the loan must be registered with the
National Collateral Registry (NCR)
Tenor
Maximum of 5 years depending on the nature of the business and the assets
acquired.
Moratorium
A moratorium of up to 1 year may be allowed depending on the nature of the
business and the assets acquired.
Interest Rate
The interest rate under the intervention shall be at not more than 5% per annum (all
inclusive).
Loan Application Procedure
Application Procedure
The Ministry of Youths Sports Development will collaborate with relevant stakeholders to identify potential training
for training/mentoring.
The youths that are duly screened (and undergo the mandatory training where
applicable) shall be advised to log on to the portal provided by the NMFB to apply
for the facility.
Processing/Approval
Upon satisfactory appraisal of application, NMFB shall apply for the release of funds in
respect of approved individuals/enterprises from the NYIF and CBN.
Note: NMFB shall conduct credit checks on applicants and those with
unsatisfactory credit reports will be rejected.
Collateral Requirement
The NMFB will leverage on the General Standing Instruction (GSI) as collateral.
Corporate guarantees will be acceptable where applicable.
Principal Repayment
Repayment shall be made on an installment basis by the beneficiaries to the NMFB
according to the nature of the enterprise and the repayment schedule/work plan
provided and agreed upon at the application processing stage.
Equitable Participation
To ensure equitable participation and even access to finance by the youths across
the country, applications will be batched according to State and Local Government
Areas (LGA) of applicants. The Bank promotes gender parity, therefore the female
entrepreneurs are encouraged to apply.
The Nigeria Youth Investment Fund is an ambitious plan which aims to reach 500,000 youth annually between 2020 and 2023.
