Tertiary Institutions Entrepreneurship Scheme: What It is, How to Access It
Are you a graduate of any of the Nigerian higher institutions of learning? Do you have an innovative business idea which you cannot start due to lack of capital? Perhaps you are already in business but struggling because of insufficient financing. Here comes your chance: the Tertiary Institutions Entrepreneurship Scheme.
What’s Tertiary Institutions Entrepreneurship Scheme?
It’s a development finance intervention fund which the Central Bank of Nigeria (CBN) recently launched to support start-ups and to drive the growth of small and medium enterprises in Nigeria.
The scheme is primarily targeted at young Nigerian graduates of universities and polytechnics. It’s goal is to drastically reduce unemployment by encouraging the youths to embrace entrepreneurship rather than chasing unavailable paid jobs.
Most importantly, it will also help to reduce under-employment. That subtly deceitful situation where somebody supposedly have a job but is better off if he hadn’t any. Under-employment can be more frustrating than unemployment.
The scheme provides access to finance to young people who have innovative business ideas. Enterprising beneficiaries can get between NGN5 million and NGN25 million in funding under the various components of the scheme.
Qualifying Business Activities Under the Scheme
According to the guidelines, the scheme will provide either loans or equity investments for innovative start-ups and youth-owned enterprises. Only enterprises in the following sectors can apply for funding under the Tertiary Institutions Entrepreneurship Scheme:
- Agribusiness– production, processing, storage and logistics
- Information technology– application/software development, business process outsourcing, robotics, data management
- Creative industry– entertainment, artwork, publishing, culinary/event management, fashion, photography, beauty/cosmetics;
- Science and Technology– medical innovation, robotics, ticketing systems, traffic systems, renewable energy, waste management
And any other activities that the CBN may approve from time to time. However, at all times, the apex bank will give priority to entrepreneurial activities that’s innovative with huge potential to create jobs, produce for export and transform the economy.
Trading activities are not eligible for funding under the TIES scheme. In order words, if you are in the business of buying and selling, you cannot get funding under this scheme. This include retail trade, wholesale trade, importing, exporting and general merchandise.
Component of the Tertiary Institutions Entrepreneurship Scheme
The CBN disburses fund under the TIES in either of three components, namely: Term loan, Equity Investment and Development Grant components.
Term Loan Component
The term loan component is in two tiers. The first tier focuses on individual small businesses, sole proprietorship and small company projects. These class of beneficiaries are eligible for term loans of up to NGN5 million
The second tier focusses on partnerships and limited liability company projects. Beneficiaries in this tier can get up to NGN25 million in term loans.
The maximum tenor for both types of loans in 5 years and its granted at a cost of 5% per annum. Effective March 1st, interest on the term loan component will be 9%. On both tiers, there’s a moratorium of one year.
To be eligible for the TIES term loan, applicants must have graduated from Nigerian universities and/or polytechnics within the past 7 years.
They must provide the following documents or information on application
- First degree and NYSC discharge (or exemption
- Valid mobile phone number (linked to your NIN),
BVN, NIN, TIN, and email address;
- Evidence of business registration (certified true
copies of relevant CAC documents); and
- Corporate bank account number of business
Equity Investment Component
The CBN is implementing this component under the AgSMEIS Equity window. The Agri-business Small and Medium Enterprises Equity Investment Scheme (AgSMEIS) is an intervention fund to support Federal Government efforts to promote small and medium businesses in the agricultural value chain.
It is a vehicle the Federal Government intends to use to generate employment and create a sustainable development. Now, the CBN is using this window to implement the Equity Investment component of TIES.
It is packaged as an equity investment in eligible projects and subject to limit prescribed by AgSMEIS guidelines. The capital injection can be for start-ups, or for the expansion of existing businesses. It is very suitable for established businesses that are troubled and needs funds to revive.
Under the Equity Investment component, the CBN will leave the investment in the qualifying business for a period of not exceeding 10 years.
And there is a lock-in period of 3 years. This is to ensure value creation and give the investee enterprise enough time to boost its management capacity before the investor’s exit.
Since this scheme passes through the AgSMEIS window, I advise you acquaint yourself with how this fund works. NIRSAL Microfinance Bank (NMB) disburses the AgSMEIS fund
The CBN disburses this component in form of grants to Nigerian universities and polytechnics to participate and compete in the national biennial entrepreneurship competition. The aim of the competition is to raise awareness about entrepreneurship. and also to create visibility for entrepreneurial and technological ideas.
Board of Experts will come from both the industry and academia to evaluate participants.
The top five emerging from the competition will thereafter receive development grants as follows:
First place – N150.0 million;
Second place – N120.0 million;
Third place – N100.0 million;
Fourth place – N80.0 million; and
Fifth place – N50.0 million.
Winners shall strictly use the grant to develop the winning innovation and support further research.
For the purpose of this grant, innovative research must focus on Agribusiness, information technology, creative industry and science &
How to Apply for Funding Under the Tertiary Institution Entrepreneurship Scheme
Application for funding under any of the components by qualifying individuals and institutions is strictly online via the approved portal:
Buchi creates content and leads the Team at Stalwart Investment Partners; a business development and investment consultancy firm. He provides strategic advisory to help SME's, small business owners and HNI's grow profitable business and make informed investing decisions.