Lagos Employment Trust Fund Pegs Loan Default Rate At 5%
So, in 2016, the Lagos State government passed a law allowing it to create a dedicated fund to tackle unemployment.
That dedicated fund came to be known as the Lagos State Employment Trust Fund, LSETF.
Its main objective is to provide financial support to residents of Lagos State, for job, wealth creation and to get rid of joblessness.
Here is the juicy part. The Fund has the mandate to directly invest 25 Billion Naira in small businesses.
The Fund will also help individuals without businesses or ideas to acquire skills to get good jobs.
The businesses, which access the loans, are supposed to pay back over a period of time with 5% interest rate per annum.
One year into the life of the Fund, how has the response been and what has been the default rate by beneficiaries?
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The Executive Secretary of the Fund, Akin Oyebode told newsmen on the sideline of the ongoing Social Media Week in Lagos that default rate has been at a single digit of about 5%.
“Our books are still within single digit. We are seeing that most people, whose repayment have past 90 days is less than 5% of our books. Most of our borrowers are showing a good sense of responsibility,” he said.
According to Mr. Oyebode who also doubles as the CEO of the Fund, the Fund “is not money for the ‘boys’” and that it is strictly for genuine, credible businesses targeted at job creation.”
“There are different reasons for not being able to repay a loan. In some cases, there are genuine reasons why some businesses cannot repay their loans. If that becomes the case, we sit down with the debtors and work out a solution.
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"But those who are unwilling, we follow the legal process. We have already started doing that for some of the businesses,” he explained.
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