BREAKING NEWS, Business
–
THE Central Bank of Nigeria, CBN, has expressed commitment to bridging the N9.6 trillion financing gap in the micro, small and medium scale enterprises, MSMEs, sub-sector of the economy. Ibrahim Mu’azu, director of corporate communication, CBN, said disbursement of significant part of the N220 billion MSMEs instituted by the regulator remains part of its commitment to providing improved financing opportunities for small businesses.
Mu’azu, who spoke at the 2015 annual conference organised by Finance Correspondents Association of Nigeria, FICAN, in Lagos, said poor access to credit remains one of the biggest limitations faced by small businesses and has to be tackled collectively by stakeholders in the financial services sector. He said 60 percent of the fund, representing N132 billion, had been earmarked for providing credit to women-owned businesses, hence giving financial backing to one of the most vulnerable segments of the society.
The CBN director said the objective was to unlock the potential of small businesses through credit support and taking such enterprises to positions where they would be able to create jobs and reduce poverty among the citizenry. He said a huge channel had been created for the administration of the loans through private or state owned microfinance institutions, finance houses, as well as commercial banks. State governments, he added, were allowed to access up to N2 billion each for lending to eligible beneficiaries through participating financial institutions in their respective states.
Mu’azu said a maximum of 10 percent of the commercial component of the fund would be channelled to trading and commerce so as to ensure that productive sectors of the economy continued to attract more financing necessary for employment creation and diversification of the country’s economic base. “The broad objective of the N220 billion MSMEs fund is to channel low interest fund through participating institutions, like banks and microfinance banks and state governments to small businesses that need it to create jobs and empower grassroots population. The fund has reduced cost of borrowing and created better opportunities for beneficiaries to declare better results,” he said.
He, however, said that successfully accessing the fund would require prospective borrowers getting them acquainted with the drawn down procedures and providing the needed information that enable their banks consider the loan requests.
Femi Egbesola, president, Association of Small Business Owners, ASBON, argued that the criteria for accessing the fund was cumbersome and largely beyond the reach of small business owners. According to him, commercial banks authorised by the CBN to disburse the funds had regarded SME operators as unserious and undeserving of such funds.
Egbesola, therefore, urged the CBN and commercial banks to rethink their SMEs’ funding strategy because of the huge benefits increased credit access by small businesses would add to the economy.
— Sep 21, 2015 @ 13:55 GMT
|
Tags:
