The House of Representatives has initiated a bill which seeks to establish the Entrepreneurship Bank of Nigeria with the objective of providing medium and long term finance for indigenous small businesses, Nigerian Tribune has gathered.
The bill sponsored by Chairman, House Committee on Media and Public Affairs, Hon. Benjamin Kalu is expected to be slated for Second Reading on the floor of the House.
The bill seen by Nigerian Tribune provides that the “authorized share capital of the Bank shall be N50 billion divided into 50 billion shares of N1 each and shall be subscribed by the Government of the Federation and the Central Bank of Nigeria (CBN).
Recall that previous intervention institutions established by the Federal Government including the National Economic Reconstruction Fund (NERFUND) and Peoples Bank of Nigeria have collapsed due to the misappropriation of public funds.
Subsection 3(2 and 3) of the proposed bill also provides that: “The proportion of the share participation of the Government and the Central bank shall be 60% and 40% respectively.
“The Minister may, by notice published in the Gazette and in the national newspapers, increase the authorized share capital of the Bank upon the approval of the Federal Executive Council and the resolution of the Board of the Bank.
ALSO READ:Â Amotekun Bill passes first, second reading in Ondo Assembly
Clause 5(1a-c) of the proposed bill also stipulates that the Banks shall be: to establish and carry on the business of lending to small businesses in Nigeria as may be determined by the Board of the Bank from time to time; to design and implement schemes of investment finance for parties carrying on small businesses in Nigeria; to enter into guarantee agreements with other parties to guarantee payment in specified circumstances; and to lend and advance money or give credit to such persons or companies on such terms and conditions as may seem expedient and in particular to customers, companies, corporations, firms and other bodies which have dealings with the Bank and to give guarantee or become surety and give security for any such persons or companies.
Subsection 5(2) also stipulates that the Bank may, for the purpose of recovering any sums owed to it under any of its facilities and services, acquire such interests, rights or property in the assets of any person concerned in such transactions in satisfaction thereof and may retain, invest, sell or otherwise dispose of any interest, right or property so acquired.
Clause 13(1a & b) further provides that the Bank shall establish a General Reserve Fund to which shall be allocated from the net profits of the Bank at the end of each financial year and before any dividend is declared: 25% of the net profits of the Bank, where the amount of the General Reserve Fund is less than the paid-up share capital of the Bank; or 12% of the net profits of the Bank, where the amount of the General Reserve Fund is equal to, or in excess of, the paid-up share capital of the Bank.
Clause 14 of the bill also empowers the bank to determine the rate of interest on loans to be given by the Bank from time to time, direct.
In the bid to safeguard the operations of the bank, Clause 22(a-e stipulates that: “Any entrepreneur seeking loan from the Bank who for the purpose of evading repayment of loan granted him, makes any false claim or furnishes any document which he knows to be false; for the purpose of obtaining loan for himself or any other person knowingly makes a false statement or produces false documents; misrepresents or fails to disclose any material fact; obstructs or assaults any officer of the Bank in the discharge of his duties, or fails to comply with any regulations made pursuant to this Bill and as a result of which the Bank incurs loss, commits offence under this Bill and is liable on conviction to imprisonment for a term not less than 1 year or to a fine not less N100,000 or to both such fine and imprisonment.