NEPC sensitizes MSMEs on export finance options
• DBN’s disbursement to SMEs hits N512bn in five years
The Nigerian Export Promotion Council (NEPC) has equipped Micro Small and Medium Enterprises (MSMEs) in export businesses with available finance options in its bid to drive the nation’s non-oil export sector.
Indeed, the council said the move was apt considering the nation’s dwindling economic resources and its overdependence on hydrocarbon resources.
The Executive Director, NEPC, Dr. Ezra Yakusak, stated this at a workshop on export finance organised by the council in Lagos.
Yakusak, who was represented by the Deputy Director, Export Development and Incentives, Esther Ikporah, said the workshop could not have come at a better time than now when the nation’s economy continues to dwindle and the prices of goods and services skyrocketing, adding that the issue of financing has become one of the major challenges facing MSMEs in the export sector today.
Meanwhile, the Chief Economist, Development Bank of Nigeria (DBN), Prof. Joseph Nnanna, stated that the development bank’s disbursement to SMEs has hit over N512 billion to more than 225,000 MSMEs in five years.
According to the NEPC boss, in countries all over the world MSMEs still remain the driving force of the economy, stressing that financing is the fuel that accelerates the growth in any industry.
“For our economy to move forward, exporting MSMEs must be aware of the various finance options that are available to them and they must be acquainted with the several intervention opportunities available to fund their business enterprise.
“It is common knowledge that funding provides a cash flow solution to exporters who sell internationally; reasons being that the terms of payment between the supplier and the buyer are usually settled at a later date. Export finance gives the MSME opportunity to gain access to working capital before the clients in the other country pays for products ordered for”, he said.
He pointed out that the goal of every business entity is to make profit and to grow, adding that export financing gives MSMEs the capacity to become bigger and better.
On his part, the chief economist, stated that 67 per cent of women and 27 per cent of youths have so far benefited from the disbursement respectively.
He also added that N10.3 billion has so far been disbursed to more than 18,669 MSMEs in economically disadvantaged regions such as Borno, Adamawa, Katsina, Yobe, Zamfara and many more.
He said despite the SME segment identified as critical by banks and the Central Bank of Nigeria (CBN), MSMEs account for only five per cent of commercial bank’s total loan portfolio, attributing the low participation of commercial bank in providing finance to MSMEs to poor knowledge of the SME sub segment.
Citing some of the common reasons for banks rejecting SME loan applications, he identified lack of collateral, problems with credit history, insufficient profitability and incompleteness of loan applications.
The Regional Coordinator, South West, NEPC, Mr. Samuel Oyeyipo, represented by the Head of Department, Product and Market Development, Mrs. Ofonedu Florence, said the conference is aimed at enabling participants’ access information needed to enhance their access to funds for export business expansion, scale up the quality of their products and increased market access.
“It is pertinent to explain that in your work as exporters lies the responsibility of ensuring effective utilisation of funds and enhanced skill so as to be able to achieve uniform standards which are capable of producing comparable, reliable, consistent products and packaging that would be acceptable in the world market,” he said.