Fidelity Bank targets new industrial clusters for funding
Disburses N80 million to entrepreneurs under CBN MSME scheme
DESPITE the challenges mitigating funding for small businesses, the Managing Director of Fidelity Bank Plc, Nnamdi Okonkwo has stated that the ability of many SMEs to maintain a good credit rating with financial institutions would further increase access to credit facilities.
According to the Fidelity Bank boss, low credit reporting by many businesses continues to limit access to funds from financial institutions, despite interventions from government through various funds earmarked for small businesses.
Okonkwo, while speaking at the disbursement of the Central Bank of Nigeria’s Micro, Medium and Small Enterprises fund to some entrepreneurs in Lagos, Tuesday, stated that gap in funding for small businesses would be bridged through adequate reporting.
Besides, the bank noted that it was targeting industrial clusters to improve its intervention profile in the real sector, especially clusters with small businesses.
Leveraging its Managed SME platform, Okonkwo stated that the bank would continue to increase access to funds by small businesses, adding that three entrepreneurs involved in various forms of manufacturing like paper, nylon and plastic are first beneficiaries of the CBN MSME fund, with a combined credit facility of N80 million.
The CBN Governor, Godwin Emefiele, had stated that a robust credit reporting system has become imperative in ensuring that credit from noble initiatives do not find their ways to unintended beneficiaries.
“Being a financial system infrastructure, a credit reporting system is by its very nature an enabler. Its potency and usefulness are dependent on usage by the relevant public. A road that is constructed to facilitate trade is of no value if traders do not commute on it. Financial service providers must engage with and actively use the financial infrastructure being created through the credit bureaus if we must attain the desired goal”, Emefiele stated.
Okonkwo explained that with N600 million loan portfolio to the Aba cluster to address their common needs, efforts are underway to finance clusters that would have multiplier effects on the economy.
“Today marks a milestone for Fidelity Bank, especially on the disbursement of a specialized catalytic loan for SMEs designed by the CBN. This is not the type of loan granted to conglomerates or oil and gas businesses.
“Fidelity Bank is proud to be a risk taker when it has to do with MSMEs because we believe the sector holds viable opportunities for growth. Though they have no tangible collateral, thereby making it difficult for them to operate, we believe than an improved credit rating system would further aid lending to the sector.
“At an interest rate of nine per cent and a tenor of five years, we believe the intervention fund by the CBN would aid growth of small businesses”, he added.
He noted that with the completion of documentation and other processes, there should be an increased access to the MSME fund.
Commending the bank on the feat, President, National Association of Small Business Owners, Dr Olufemi Egbesola expressed delight to see small business access the intervention fund through the bank adding that the feat is a milestone for SMEs in the country.
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