As part of measures put in place to cater for the funding of 17.3 million number of Micro, Small and Medium Enterprises (MSMEs) in Nigeria, the Central Bank of Nigeria requires the sum of N9.6 trillion
According to the Assistant Director, Development Fund Department, Central Bank of Nigeria (CBN), Mr Jonathan Tobin who gave the figures yesterday in Abuja at the Micro, Small, Medium Enterprise Development Fund (MSMEDF) workshop organiSed by Banker’s Committee said the existing 17.3 million MSMEs employed about 33 million people and just 4.2 million MSMEs have access to finance.
He said that banks and other lending institutions’ aversion to borrowing small businesses in the informal sector caused the financing gap. “Nigeria banks are averse to taking risk. They like to play safe. The economy is virtually collapsing yet banks keep declaring huge profits,” he said.
He observed that, from 2002 till date, lending by the conventional banks to the sector has reduced significantly , adding that N9.6 trillion is needed to bridge the financing gap in the sector. He said: “Banks and other lending institutions should offer tailor made solutions to lending to MSMEs instead of the current one size fit all approach. Customised risk management lending method in place of collateral driven lending currently employed by banks should be developed.
We strongly recommend that banks start lending from their balance sheet. There is also need for collaboration between CBN and other government agencies on the implementation of various initiatives geared towards de-risking the sector and making finance available to MSMEs,” he said.
According to him, the CBN’s introduction of policies such as the N220 billion MSME Development Fund, the SME Credit Guarantee Scheme and the National Secured Transaction Collateral Registry and Agriculture Credit Support Scheme aimed at bringing the credit gap . He urged the banks to patronise the entire scheme, which means they will have to invest their own monies in MSME and not focus entirely on the schemes that CBN provides the funds for.
The Director, Development Finance, CBN, Mr Mudashiru Olaitan said inflation would reduce if MSMEs were properly supported and financed. He said, “The country needs a strong financial system that is capable of providing innovative, dynamic and a wide range of financial services. We must support MSME to grow because if they grow, the country will be better for it. The sector is already employing a lot but more people can be employed if properly funded”.
Leave a Reply