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LSETF Halts Loan Repayments For SMEs And Startups In Response To COVID-19

The Lagos State Employment Trust Fund (LSETF) says it is suspending the repayment of loans provided to SMEs and startups in the state.

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Acting Executive Secretary of the LSETF, Teju Abisoye, explained that the moratorium was introduced to lessen the financial burden brought on businesses by the lockdown in the state.

The measure targets 11,000 small and medium-sized enterprises that have benefitted from the LSETF’s loan scheme. It also covers startups that have accessed its Loan and Hub Financing Programmes. 

On Sunday, March 29, the Federal Government had announced a lockdown of Lagos and Ogun States, as well as the FCT, in a bid to halt the spread of the coronavirus in the country. The measure, as well as an earlier restriction on movement in Lagos, has caused the closure of most businesses in the state.

SMEs and larger companies have struggled to meet their financial obligations, as their cash flows have dried up.

Explaining the LSETF’s decision, Abisoye said the agency hoped that it would be a “spark of optimism in anticipation of a quick return to normalcy and business continuity.”

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She also announced that the LSETF was suspending its Lagos Innovates Workshop Vouchers Programme for one month. The program was designed to avail startup founders of the skills and workspaces they need to build and scale their ventures. 

The Lagos State Employment Trust Fund was established by the Lagos state government in 2016 to tackle unemployment by providing loans and skills training to people and businesses in the state.  

Government-run institutions concerned with the economy say they are responding to this problem. The CBN has announced a ₦50 billion intervention fund to help small businesses and households cope with the financial difficulties that the pandemic has brought on. And the FIRS has announced concessions to tax payers.

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Ikenna Nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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