N9.6tr Needed To Fund MSMEs In Nigeria – CBN | Independent Newspapers Limited
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N9.6tr Needed To Fund MSMEs In Nigeria – CBN

Posted: Sep 3, 2015 at 7:42 pm   /   by   /   comments (0)

By Akinwunmi King,


The Central Bank of Nigeria (CBN) has declared that in order to adequately fund and bridge the financial gap in Micro, Small and Medium Enterprises (MSMEs) in Nigeria, a sum of N9.6 trillion will be needed.

CBN Assistant Director, Development Fund Department, Jonathan Tobin, who made this disclosure on Tuesday at a workshop organised by the CBN’s Banker’s Committee on Micro, Small, Medium Enterprise Development Fund (MSMEDF), explained that banks in the country are not willing to take risk.

According to him, banks and other lenders’ aversion to lending to small businesses in the informal sector has widened the financing gap in the sector.

“Nigerian banks are averse to taking risk. They like to play safe. The economy is virtually collapsing yet banks keep declaring huge profits.

“There are currently 17.3 million MSMEs in Nigeria that employ about 33 million people. Yet, only 4.2 million of these have access to finance. From 2002 till date, lending by Money Deposit Banks to the sector has reduced significantly. Now, N9.6 trillion is needed to bridge the financing gap in the sector,” Tobin stated.

Speaking further, he said : “banks and other lending institutions should offer tailor-made solutions to lending for MSMEs; instead of the current one size fit all approach, adding that customised risk management lending method in place of collateral driven lending currently employed by banks should be developed.

“We strongly recommend that banks start lending from their balance sheet. There is need for collaboration between CBN and other government agencies on the implementation of various initiatives geared towards de-risking the sector and making finance available to MSMEs,’’ he added.

Tobin, however, urged commercial banks not only to patronise the CBN schemes but also boost investment outlay in MSME.