The Lagos State Employment Trust Fund (LSETF) is a N25 billion Fund established by the state government to power SME and improve the skills of entrepreneurs, with a view to helping Lagos residents create a thriving SME economy.
Specifically, the Fund was established by the Lagos State Employment Trust Fund Law 2016 to serve as an instrument to inspire the creative and innovative energies of all Lagos residents and reduce unemployment across the State.
It has the mandate to directly invest N25 billion in helping Lagos residents grow and scale their Micro Small and Medium Enterprises (MSMEs) or acquire skills to get better jobs.
Meanwhile, the Fund is set to raise additional N25 billion from international donor agencies to boost its program of micro, small and medium, MSME, funding. This will bring the total amount in the Fund’s management to N50 billion, haven received a take off funding of N25 billion last year.
Capacity building support
Akin Oyebode, Executive Secretary, LSETF, said the Fund will focus on promoting entrepreneurship by improving access to finance, strengthening the institutional capacity of MSMEs and formulating policies designed to improve the business environment in Lagos State. “We have a set target of providing financial support to over 100,000 MSMEs within the next 3 years; support the creation of 300,000 direct and 600,000 indirect jobs; and add over 200,000 new taxpayers to the tax register.
To also ensure sustainability of the Fund, we will aim to raise a minimum of N25 billion from domestic and international donors, in addition to N25 billion committed by the Lagos State Government. Our interventions will provide loans to micro, small and medium enterprises at single digit interest rates per annum; we will also provide training and capacity building support to the business we finance, giving them the necessary technical support to drive growth and job creation,” Oyebode stated.
705 beneficiaries: In January, 705 entrepreneurs emerged the first set of beneficiaries of the Lagos State Employment Trust Fund (LSETF) loan scheme, designed for enterprise development and driving productivity for the Nigerian economy. In his remarks, Governor Akinwunmi Ambode said the first batch of the LSETF beneficiaries will access about N1 billion in financing with a low interest rate of 5 percent, which was favourable than what the financial institutions were offering in the country. He charged them to use the funds judiciously, by providing effective services, creating more jobs and focusing on innovative solutions for the economy, becoming economic agents of transformation.
According to the LSETF executive secretary, “The businesses we support must demonstrate capacity to repay our loans; be owned by Lagos residents duly registered by the Lagos State Residents Registration Agency (LASRRA); show evidence of tax payments to the Lagos Inland Revenue Service (LIRS); and have valid Bank Verification Numbers (BVNs). In addition to our MSME financing schemes, we will also train unemployed residents to either take up identified jobs or run their businesses.”
Beneficiaries can access maximum loan of N500,000.00 at an interest rate of 5 percent per annum, to be spread over 12 months. Under this category, the applicant’s business must be the main source of livelihood and he/she must also demonstrate existence of a verifiable and economically stable market for goods and services. The business must have a minimum turnover of N20,000 monthly. In cases where applicant is unbanked, turnover can be estimated using price of applicant’s service and walk in or buying rate. The business should have been operational for at least one year otherwise the applicant should have a certification in a trade and reference from the certifying body.
Maximum loan obtainable is N5,000,000 in the case of an SME, and must be for asset acquisition and/or working capital for the business at an interest rate of 5 percent per annum payable over 36 months.
The business must be located in Lagos; registered with the CAC; must be registered with the LIRS and must be in existence for more than 12 months.
Download and complete the applicable forms and submit to LSETF Office. For an application to be valid, the submitted form must include a copy of the LASRRA Card and Tax Identification Number. The first phase closed on Friday, February 3, 2017. The second phase is expected to roll out soon.