The Lagos State Employment Trust Fund has allocated a sum of a $6.6m grant for micro, small and medium enterprises (MSMEs) to ease the impact of the COVID-19 pandemic and boost economic recovery.
The grant tagged Paycheck Protection will be disbursed under the COVID-19 Action Recovery and Economic Stimulus (CARES) programme and no fewer than 2,500 businesses will benefit from the programme.
The CARES programme is a $6.6million initiative of the Lagos State Employment Trust Funds (LSETF) facilitated by the World Bank to support the recovery of micro, small and medium enterprises (MSMEs) from the COVID-19 pandemic.
According to LSETF Executive Secretary, Tejumola Abisoye, it is a state-level intervention designed to mitigate the local effect of the pandemic, especially by protecting the livelihood of existing businesses and supporting the recovery of economic activity especially among SMEs.
“It’s a brand new programme for MSMEs in Lagos, paycheck protection; it seeks to make sure people don’t lose their jobs,” Abisoye told journalists in Lagos last month.
Abisoye explained that that the intervention is in three categories: Loan limitation, operational grant and programme
She said: “The first is by reducing loan limitation. People that have existing loans with financial institutions. How do we provide credit grants to them? A maximum of 40 per cent of their loans will be given to them as grants to help ease the burden of interest payment where the loans have been taken to push the effect of the pandemic for the business. So, it must have been taken post-COVID-19 pandemic. Those who have taken loan post-pandemic are eligible for the grant.”
On the unavoidable cost or operational grant programme, she said: “This is to reduce up to 50 per cent of businesses’ unavoidable expenses such as payroll, rent, utilities, things that are direct without which the business cannot operate. For those who couldn’t pay their staff, we are going to support such business with a maximum of 50 per cent as a grant for operation for one year. That means we will support for six months maximum,” Abisoye said, adding that this grant will not be used to pay for taxes and regulatory levies.
On the third category which is the adoption or upgrade of digital technology, she said: “Here we are going to strengthen businesses and make it more resilient in case of another pandemic or any issues around what technology can solve for you. If you recall, businesses that were online were not affected. In fact, you heard about Amazon making more money within 11 months than traditional businesses, luxury businesses that were online made more money in this space.
“So, what were those things that enabled those businesses? It was the IT infrastructure that already existed. We want to support businesses to adopt IT infrastructure to make them do much more in any event.”
Applicants must possess Bank Verification Number, LASRRA ID, company registration ID, Tax payment slip to be eligible
