SMEDAN Urges Financial Institutions To Ease SMEs Access To Funds
As stated in a previous post, many SME-related events have been flagging in Nigeria, and, this is one of them.
The Small and Medium Enterprises Development Agency of Nigeria, SMEDAN, has urged the financial institutions in Nigeria to orchestrate programs that would enable small business owners to gain easy access to funds. This call was made by Mr. Dikko Radda, the Director-General of SMEDAN, in an interview with the newsmen in the Federal Capital Territory, Abuja, last week.
Speaking, Radda noted that the major challenge for SMEs in the country has proved to be funding, while informing that Nigerian Federal Government has put in much effort to ensure that it doesn’t remain an issue for long. He also informed that the agency had been pleading with the financial institutions in the country to set up programs that would eliminate the difficulties small business are faced with while trying to access funds. According to him, the government had a lot of funding programs for SMEs, but the prevailing problem has been the loan obtaining process.
The Director-General of SMEDAN said that “In an effort to help SMEs access loans, we are in the process of establishing SMEs Rating Agency of Nigeria in collaboration with the Bank of Industry (BOI), Nigeria Export and Import (NEXIM) Bank and Dun and Bradstreet Nigeria Limited.” Radda also told the newsmen that SMEs in Nigeria have suffered high mortality rate largely due to the lack of finance for sustenance. “The rating of small and medium enterprises would enable them secure financing from banks,” he said.
In a related development, the Central Bank of Nigeria (CBN) has established the National Collateral Registry of Nigeria to improve access to finance particularly for Micro, Small and Medium Enterprises (MSMEs). This collateral registry would provide room for the use of movable or personal assets as collateral that remained in possession of control of the borrowers, thereby, improving access to secure finance, Radda said. He added that “You can use your movable assets, such as generator, car, machine or even gold, as far as it is registered to access funds.”
Radda reckoned the development of BOI is a welcome one, and expressed dismay that SMEDAN was not represented on the bank’s board, expressing that, “There should be an agency that can represent the interest of SMEs at the board of the bank.”