Nigeria Promises To Encourage Concessionary Funding For Small, Medium Scale Enterprises

Nigeria Federal Government has promised to encourage well planned concessionary funding initiatives for the Micro, Small and Medium Scale Enterprises in its bid to help overcome their problem of access to low cost financing.
According to President Muhammadu Buhari, nn a speech delivered on his behalf today by Vice President Yemi  Osinbajo, the government’s resolve to engage more with Small and Medium Scale Entrepreneurs is aimed at ensuring sustainable economic development and wealth creation in the country.
“SMEs are grossly under-served in terms of low cost financing. There are several reasons why this may be so. These include how to deal with the sheer scale of numbers of SMEs that need to access concessionary funds in order to make an appreciable impact.”
The Vice President who spoke in Abuja at the SME Financing Conference with the theme: ’Bridging the Nigerian SME Funding Gap’ convened by the Nigerian-American Chamber of Commerce, Kaduna State Chapter and the Economic Affairs Section of the United States Embassy, assured that working through co-operatives and trade organizations credit can reach the large numbers.
He said the importance of financing SMEs has never been lost on the governments, but for lack of access to affordable loans, adding that several deliberate and sustained financial initiatives have been put in place by the Central Bank of Nigeria except that SMEs still remain grossly under-served.
According to him Co-operatives, Market-women and Trade groups, Artisans and start-up companies are veritable partners that are being engaged towards the creation of wealth with overall goal of boosting job creation and ultimately economic growth and development.
“This would be the main focus of our engagement with SME sector. We believe that working through the co-operatives, Market and Trade organizations, credit can reach the largest numbers.”
He pointed out that the Central Bank had in 2003 put in place an Entrepreneurship Funding initiative where banks set aside ten percent of their annual profit before tax for equity investment schemes in SMEs.
The Vice President added that in 2010, CBN approved 500 billion Naira debentures stocks issued by the Bank of Industry (BO1) out of which 200 billion Naira was set aside for re-financing and re-structuring of banks existing portfolios’ to Nigerian SME manufacturing sector, offered at a seven percent interest rate, all in a bid to ensure that funding challenges militating against their growth and development are frontally addressed.
“In 2013,CBN again launched MSME Development Funds with the broad objective of channeling low interest funds to MSME sub-sector by providing facilities to qualified and eligible participating financial institutions for lending to SME.”
Professor Osinbajo said that the administration will continue to put in place innovative policies and programmes towards ensuring that funds get to SME because they form the fulcrum of any meaningful growth and development of the industrial sector, adding that the future of the economy and expansion of commerce actively depend on MSMEs.
He said that innovative, continuous, focused and deliberate policies and regulatory engagements must be put in place to ensure that supporting SMEs is sustained and fulfilled. [myad]