Financing SMEs In Nigeria | Independent Newspapers Limited
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Financing SMEs In Nigeria

Posted: Jun 24, 2015 at 12:07 am   /   by   /   comments (0)

According to the Central Bank of Nigeria (CBN), Small and Medium Enterprises (SMEs) are critical to the development of any economy, as they possess great potential for employment generation, improvement of local technology, output diversification, development of indigenous entrepreneurship and forward integration with large-scale industries.

However, there has been gross under performance of the SMEs sub-sector and this has undermined its contribution to economic growth and development of the country.

CBN listed the key challenges facing the SMEs to include unfriendly business environment, poor funding, low managerial skills and lack of access to modern technology.

However, among the challenges that SMEs face, shortage of finance occupies a very central position and in order to reverse the situation, the CBN in April 2010 approved the investment of the sum of N500 billion-debenture stock to be issued by the Bank of Industry (BOI).

In the first instance, the sum of N300 billion will be applied to power projects and N200 billion to the refinancing/restructuring of banks existing loan portfolios to Nigerian SME/manufacturing sector,

However many SME operators are not aware of the facility and some that are know about have it have not been able access it because of the structure of the business or its ownership structure. In many instance, SME operators do not make the operations bankable and, therefore, cannot participate in loan arrangement.

But speaking at a seminar that was organised for SME operators in Lagos, Head, SME Desk, Union Bank, Mr. Rabiu Tata Fagge, advised SME operators to make sure that they keep proper records of their operations in order to access the loan.

According to him, improper account record could deny SME operators access to the loan. He told the participants to explore the opportunity to participate in the scheme before approaching commercial banks for loans.

He urged SME operators to come to the bank and get help in accessing the loan, adding that the also assist SME operators to write bankable business plans.

Also speaking at the seminar, Business Head, E-Channels and CWG2.0, Computer Warehouse Group, Olatayo Ladipo-Ajai, said SME operators should use the Internet to grow their business, adding that his firm has platforms, which SME operators can use to reach a wider market.