Minister explains why banks are unable to lend to SMEs
The Minister of State, Budget and National Planning, Hajiya Zainab Ahmed, has linked the inability of commercial banks to lend to Small and Medium Enterprises (SMEs) to federal government’s indebtedness to banks via local borrowing.
Ahmed said this yesterday in Lagos while responding to questions from participants at the 5th EU–Nigeria Business Forum.
The News Agency of Nigeria (NAN) reported that the second day of the forum, titled, ‘Harnessing Nigeria’s Potential for Economic Growth,’ was dedicated to integrating SMEs into global value chain.
The major problem echoed at the forum centred on the inability of SMEs to access finance from commercial banks in the country.
But the minister said “banks are not able to borrow to SMEs because government is heavily borrowing from them,” adding “80 per cent of Nigeria’s domestic debt comes from commercial banks.”
Ahmed said that the present administration was working with development partners and the International Finance Corporation (IFC) to ensure that it secured loans from abroad, explaining that government was doing everything possible to ensure real GDP growth rate of about three to four per cent by next year.
She added that government needed the European Union (EU) to continue to support its developmental agenda and appealed to it to provide a European Investment Bank (EIB) centre in Nigeria.