Only 2,083,200 MSMEs have access to credit in Nigeria, says SMEDAN
*Mulls Establishment Of Micro Finance Bank To Support MSMES
The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), has revealed that small scale businesses in the country may continue to grapple for breath due to lack of credit facilities.
The Director General, SMEDAN, Dr. Olawale Tunde Fasanya, who spoke to The Guardian on the issue decried that only 2,083,222 out of 49.6 million existing Micro, Small and Medium Enterprises (MSMES) have access to credit facility for business expansion and sustainability.
The agency also described as unfortunate, the fact that 44,640,200, representing 90 per cent of the number are mere Nano businesses that are not often recognised in terms of credit disbursement.
Fasanya, however, explained that, in spite of their meagre dispositions, nanobusinesses sustain the economy. According to him, “it will surprise you to know that they are the ones sustaining the nation’s economy.
“They are the one-man businesses that we see around our households selling yams, tomatoes, akara, pepper and others.
“They sustain the economy because the economic shocks do not affect them. If you like, let the naira go as high as N1000 to one dollar, they will only increase their prices and continue to be there, they won’t fold up.”
Fasanya also blamed the lack of credit facility to small scale businesses on their attitude to pay back loans. “So, you won’t blame the banks as they also find it difficult to source their funds at some rates, which they won’t give to somebody who will not be able to pay back.
“The only development bank that is doing a bit good for the MSMEs is the Bank of Industry (BOI), the Development Bank of Nigeria (DBN) is also a wholesale bank, meaning they are just lending to other banks who will pay back loans with interests.”
SMEDAN boss stressed that the agency was already suggesting to government, a credit guarantee scheme that can give assurance to banks to enable them lend to MSMEs adding.
“We are also encouraging the SMEs to come together as co-operatives. It will also give the banks some level of confidence to give out loans and credit facility to them.”
Fasanya added that going forward, all hands are on deck to support the MSMES to grow, especially in the area of funding with the coming on board the micro-finance bank due for launch as soon as it gets the approval of Central Bank of Nigeria (CBN).
He said, “As it stands, we are just waiting for the approval for the establishment of a microfinance bank by the CBN. We are not doing it alone; we are just a shareholder. It is on board, and I believe that before the end of this year, it will start functioning”, he said.
He called on the youths who are talented in such areas as tailoring, carpentry to make use of the facilities already available at SMEDAN premises to advance their businesses as a way of reducing the cost of production.
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