‘Access to finance remain major challenge to SMEs’

Despite the role Micro, Small and Medium Enterprises (MSMEs) play in economic development; they are still not given the adequate attention they deserve to change the economic fortune of Nigeria.

This was the submission by Young CEO Initiative and other young entrepreneurs at a press briefing in Lagos.The Founder, Young CEO Initiative, Aigbe Omoregie, explained that the role of MSMEs in the economic development of Nigeria cannot be over emphasised, adding that they play a significant role in the development of a nation ranging from contribution to the nation’s Gross Domestic Product (GDP), employment creation, export, increased value addition and technology advancement.

According to him, MSMEs contribute 54 per cent to Nigeria’s GDP and 7.27 per cent to export as at 2013, pointing out Nigeria Bureau of Statistics as at 2014 recorded the total number of persons employed by the sector was 59 million which represents 84.02 per cent of the Nigeria total labour force.

He acknowledged the efforts of the federal government in job creation, implementing programs and policies targeted towards the youths to encourage entrepreneurship.

“We therefore want to appeal to the government with a sense of urgency to come to our aid as we are having real problems with accessing finance and this has resulted to the closure of many of our various companies and organizations. This would only defeat our efforts in reducing the level of unemployment in the country.

“We find it difficult accessing credit facilities from commercial banks which leave us at the mercy of smaller financial homes who give us facilities at a very ridiculous interest rate that eventually eliminate the purpose of growth. In 2014, according to PwC, only 11 per cent of firms have access to commercial bank loans. Not only is access to credit facilities limited, but the terms and conditions attached to it is often impossible and interest rate is usually unreasonably high.”

He therefore appealed to the federal government to come urgently to their aid before the businesses of the youths who serve as role models collapse.He also advised the federal government to introduce programmes and incentives where loans are easily accessible to entrepreneurs at low interest rates within the shortest period of time.

He urged development finance institutions such as Bank of Industry (BoI), Bank of Agriculture (BOA), Development Bank of Nigeria (DBN) to try as much as possible to simplify the process of getting credit facilities for entrepreneurs to thrive.

“We do understand that we need to collaterise our facilities, but we also believe that the requirements can be more flexible to enable easy accessibility. The Young CEO Initiative advocate to the youth to be self-employed, as we have trained thousands of them on how to be self-sufficient and self-empowered. We also in our little way, have employed a lot of them by exposing them to trainings of various kinds and access to grants, but all these would hit a brick wall due to lack of proper funding or access to low interest facilities,” he said.