Lagos State employment trust fund, LSETF has announced plans to partner with high net-worth individuals on a funding initiative that could provide thousands of job to Lagosians. According to the plan, contained in a press release sent to Nairametrics, the LSETF.
How will it work
From what we gather, the LSETF will seek funding partnership from high networth individuals, private organizations, donor agencies, non-governmental agencies, international development organizations who are looking to leverage on the fund’s operations and technical know-how to extend funding to anyone young Startup owner.
A recent observation suggest most investors find it hard going through the rigours of vetting Startups and accessing their funding requirements. As such, they can ride on the LSETF’s structures to vet Startups, access their funding needs, disburse funds and monitor performance.
Step in the right direction
This seems like a step in the right direction for the fund considering that it cannot go it alone in providing funding to thousands of Startups scattered around the state. It is also limited by the use of state finances to fund projects which may never materialize or be ever profitable. Aligning with the private sector, therefore gives the fund an ample pool of funds while instituionalizing the scheme.
We not yet clear if the LSETF will be launching a separate vehicle or fund for this arrangement. Will partners be given access to directly invest in these Startups or will they do so under a special purpose vehicle created by LSETF?
Here is a copy of the press release.
In line with its quest for sustenance of its operations and to ensure its programmes reach more unemployed youths, the Lagos State Employment Trust Fund (LSETF or The Fund), an initiative of the Lagos State Government, has launched a funding partnership program targeted at high net worth individuals, private organizations, donor agencies, non-governmental agencies, international development organizations. The Fund which already has N25 billion commitment fund from the Lagos State Government, plans to double the figures through the funding partnership arrangement as it seeks to expand its operations to benefit more businesses and people in the State.
The LSETF, which is backed by the Lagos State Employment Trust Fund Law 2016, has a strategic target to create and sustain 300,000 direct and up to 600,000 indirect jobs by 2019, provide loans to at least 100,000 MSME by 2019.
Commenting on the call for partnership, LSETF’s Executive Secretary, Mr. Akin Oyebode stated; “According to the National Bureau of Statistics, 35% of Nigeria’s productive population are either unemployed or underemployed. This is especially worrisome when the youth, have an unemployment/underemployment rate of over 50%. This means one of every two persons under the age of 35, are unable to access sustainable employment.”
The LSETF has been working to combat the employment scourge in the state through its various programmes; such as its single-digit interest bearing (5%) loan schemes to help Micro, Small & Medium Enterprises (MSMEs) fund their growth and consequently create job opportunities for the people of Lagos state. In addition, youth who have completed vocational trainings can also access loans in the Micro Business Start-Up Program to help them start their own small businesses, whilst the unemployed can get training and subsequent job placements opportunities.
However, to ensure the LSETF creates as many jobs as possible, they will require additional funding from individuals, private organizations, donor agencies and other partners.
The United Nations Development Program (UNDP) has already set the ball rolling in this direction by entering into a $4 million partnership with the LSETF to provide support to its Employability Program. The agreement, which was signed in May 2017 will see the UNDP and LSETF commit substantial financial and technical resources to the Lagos State Employability Support Project between May 2017 and April 2019. This partnership is aimed at training over 10,000 youth in the state.
The project will improve the quality of vocational training programmes for the manufacturing, health care, construction, entertainment, tourism and hospitality sectors; upgrade training content to make the labor force more competent; strengthen vocational instructor training and improve the capabilities of the participating technical colleges and vocational training centers (VTCs) to plan and manage the training programmes.
The public and private organizations can support the work of the LSETF by making a commitment to donate a specific amount and the LSETF will match this sum and design a lending or employability program to support your target segment. They can also make a grant towards LSETF lending, employability or innovation programs; commit to employ youths trained by LSETF or to admit LSETF loan beneficiaries as vendors to serve your organization”.