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Ambode sets aside N25bn for small businesses; beneficiaries to pay only 1% interest rate

Lagos State Governor, Mr. Akinwunmi Ambode has sent the Employment Trust Fund Bill 2015 to the State House of Assembly for consideration and ratification.

The bill aims to radically transform employment creation in the state with N25bn proposed to be spent over four years as a support scheme for young entrepreneurs and small businesses.

According to a statement signed by the Commissioner for Information and Strategy, Mr. Steve Ayorinde on Saturday, the Employment Trust Fund Bill is in fulfillment of one of the campaign promises of Governor Ambode, which aims to inject N25bn into job creation and employment opportunities over a period of four years. The fund will be administered as soft loans to bona fide residents of the state that desire facilities ranging from N100,000 to N1,000,000, or more, as the case may be.

“Just about 1% interest rate will be charged on the loan to take care of administrative expenses. The state government’s desire is to allow enterprising Lagos residents who do not have access to loans or other forms of finance with stringent conditions enjoy repayable soft loans to establish a business venture or rescue a struggling small concern,” he said.

Ayorinde said the bill seeks the establishment of the ETF to be modeled after the state’s Security Trust Fund, which means it will be funded through joint contributions from the Lagos State government and the private sector and will be administered through an independent Trust backed by an efficient structure that will disburse the funds.

The ministry of Wealth Creation and Employment, which was created in June by Governor Ambode, will oversee the affairs of the scheme, while the funds will be channeled through the state’s microfinance institution.

Beneficiaries, he said, would be selected across the five divisions in the state: Lagos Island, Ikeja, Badagry, Epe and Ikorodu in order to allow citizens in every part of the state enjoy the novel scheme.

Ayorinde said the state government was keen about start-up businesses because every beneficiary will be able to employ a few other persons, thereby taking several thousands of people off the streets.

“The aim of this scheme is to give employments to thousands of people through the jobs that will be created by the beneficiaries,” he said.

He added that the state government would also set up Business Support Centres to assist and monitor progress in the beneficiaries’ various businesses.

He said about N6.3bn would be required for the scheme every year and that half of what is needed for its implementation for the first year has already been set aside, thanks to the competent financial management that the state governor has deployed since he assumed office five months ago.

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