The Lagos State Government has so far disbursed N4.5 billion to over 5000 Micro, Small and Medium Enterprises (MSMEs) in one year. Secretary to the State Government Olatunji Bello disclosed this at an event in Lagos recently. The funds were disbursed through the Lagos State Employment Trust Fund (LSETF) in the last one year. The state will also train 16,000 youths in vocational education in partnership with the United Nations Development Programme and private sector employers.
Why LASG is supporting MSMEs
Micro Small and Medium Enterprises (MSMEs) are a key driver of growth in the Nigerian economy as they employ a huge number of people. Supporting MSMEs in the state to expand and grow will reduce unemployment in the state. Staff employed by the SMEs will pay tax to the state government.
The SMEs will also pay various taxes and levies as they will be captured by the tax authorities. A drop in crude oil prices, pushed the country’s economy into recession, and left many states struggling to meet salary and pension obligations. This has also forced states to look inward and grow internally generated revenue.
How the scheme works
Applicants are selected and verified through an online portal www.lsetf.ng. Micro enterprises can get a maximum of N500,000, while Small and Medium Scale Enterprises can get up to a maximum of N5 million. Interest rate for the loans is 5%. The LSETF also partners with High Networth Individuals (HNIs), private organizations, donor agencies, non-governmental agencies, international development organizations who leverage on its technical capability.
The LSETF was established in 2016 with an initial seed funding of N25 billion. The fund has the mandate to lend to MSMEs owned by residents of the state. In addition, the fund also provides vocational training. The fund has a target to create 300,000 direct jobs, 600,000 indirect jobs and give loans to 150,000 MSMEs by 2019.