SMALL AND MEDIUM INDUSTRIES EQUITY INVESTMENT SCHEME (An Initiative Of The Bankers' Committee)

RESPONSIBILITIES OF STAKEHOLDERS IN THE SMALL AND MEDIUM INDUSTRIES EQUITY INVESTMENT SCHEME

RESPONSIBILITIES OF STAKEHOLDERS IN THE SMALL AND MEDIUM INDUSTRIES EQUITY INVESTMENT SCHEMEnalty spulated for non compliance.

(1) IDENTIFIED KEY STAKEHOLDERS:

The identified key Stakeholders include:

* Government
* Central Bank of Nigeria (CBN)
* Bankers' Committee
* Individual Banks
* Independent Fund Managers
* Securities and Exchange Commission (SEC)
* Promoters of Small and Medium Industries (SMI)

(2) RESPONSIBILITIES OF STAKEHOLDERS

2.1 GOVERNMENT:

* Stable macro-economic environment
* Stable and reliable regulatory and legal framework
* Adequate physical infrastructure
* Prudent fiscal regime
* Capacity building

Specifically, the responsibility of the government with respect to the implementation of the Small and Medium Industries Equity Investment Scheme (SMIEIS) is to pass the enabling legislation to provide the following tax reforms and incentives:

• Make the banks' contribution to the Scheme enjoy 100 percent investment allowance
• Reduce tax paid by SMI to 10 percent
• Provide 5 years tax holidays to the SMI under the Scheme
Exempt divested fund under the Scheme from capital gain tax

2.2 CENTRAL BANK OF NIGERIA:

* Ensure sound financial system
* Liaise with the Federal Ministry of Finance to ensure that the required tax incentives are granted.
* Monitor the implementation and gather statistics to quantify the impact of the Scheme.
* Articulate clear guidelines for the implementation of the Scheme.
* Liaise with SEC to facilitate and simplify the registration of venture capital operators.
* Ensure each bank's compliance with the guidelines of the Scheme and penalize erring banks in accordance with the penalty stipulated for non compliance.
* Capacity building.
* Disseminate information on the Scheme to SMI and the larger public.
* Prepare annual progress report.
* Provide data for the review of the Scheme after 5 years for "the Bankers' Committee.

2.3 BANKERS' COMMITTEE:

* Obtain the co-operation of the major stakeholders
* Disseminate information on the Scheme to SMI promoters and the larger public.
* Oversee joint collaborative efforts under the Scheme
* Monitor the implementation of the Scheme
* Capacity building
* Review the Scheme after 5 years

2.4 INDIVIDUAL BANKS:

* Provide funding for equity investment in SMI
* Comply with the guidelines of the Scheme
* Report on the activities of the Scheme on quarterly basis to the Agricultural Finance Department of the Central Bank of Nigeria.
* Capacity building

2.5 INDEPENDENT FUND MANAGERS:

• Manage equity investment in SMI on behalf of banks
• Report on the activities of the investment to the banks on a monthly basis
• Provide strategic support to Small and Medium Industries to minimize the risk of the investment
• Exit the investment at the instance of the bank
• Comply with the guidelines of the Scheme
• Register with SEC

2.6 PROMOTERS OF SMALL AND MEDIUM SCALE INDUSTRIES

• Ensure prudent utilization of funds
• Keep up-to-date records on project activities for inspection by the appropriate authorities when required
• Comply with the guidelines of the Scheme

2.7 SECURITIES AND EXCHANGE COMMISSION (SEC)

• Facilitate and simplify registration of Venture capital Operators
• Provide enabling environment, specifically, the development of the Capital Market
• Liaise with other arms of government to reform the capital market to ensure that SMI have access to the market

BANKERS’ COMMITTEE
JUNE 19, 2001