LAGOS, Federal Republic of Nigeria. The Central Bank of Nigeria (CBN), at the weekend estimated that the nation needs about N9.6 trillion to finance the gap existing in its Small Medium Enterprises (SMEs) sector.
Speaking at a one-day 2015 annual conference of the Finance Correspondents Association of Nigeria (FICAN) in Lagos, titled: “Banks and SMES in Nigeria: Prospects, Challenges and Success Stories,” Director of Communications, Ibrahim Muazu, noted that Nigeria, like other countries needs to develop its SME sector.
The business model of the sector, he explained, is cause for concern to Deposit Money Banks today, because some of the operators lack enduring business plans.
As a result, he continued, the issue of advancing loans to the sector calls for mandatory biometric capturing to greatly reduce risks of such loans becoming toxic at the end of the day.
Meanwhile, he said that DMBs, Primary Mortgage Banks and Micro Finance Banks have so far mobilised N19.3 trillion from deposit and other sources, out of which N15 trillion has been disbursed.
Muazu added that more than N50 billion of the N220 billion fund set aside for SMEs had been disbursed, while indicating that CBN in its provision for the SMEs scheme have put in over N1.5 trillion so far.
He explained that the apex bank launched the N220 billion MSMES intervention initiative with the broad objective of channelling low interest funds to the sector through participating institutions like banks, micro-finance banks and other vehicles established by state government.
He hinted that 10 per cent of the commercial components of the funds have been channelled to trade and commerce.
In his keynote address at the event, Rasheed Olaoluwa, Managing Director/Chief Executive of the Bank of Industry (BoI), said 10 banks have been recognised for being SME-friendly in the way they support to the growth of the sector.
According to Olaoluwa who was represented by Abdul-Ganiyu Mohammed, General Manager, SMEs, BoI is partnering the identified SME-friendly DMBs to provide working capital for identified SME customers at a negotiated interest rate of Monetary Policy Rate (MPR) plus six per cent.
Credit: Daily Independent (Nigeria)
