MSMEs get funding relief as banks pledge bigger support
Micro, small and medium enterprises have received more funding support from two Nigerian banks, the Bank of Industry (BoI) and other organisations in the financial sector of the economy.
Access Bank, which pumped N30 billion into the MSME sector in 2014, has pledged to double its support to N60 billion in 2015. Similarly, BoI, Nigeria’s development bank, plans to support MSMEs with N300 billion within the next five years.
Also, Nextzon, a consulting firm, has unveiled Oxfam’s €100 million facility aimed at boosting impact-making SMEs. Nextzon is the manager of the Oxfam’s facility.
Fidelity Bank and the Bank of Agriculture (BoA), among others, have pledged various forms of support to MSMEs to drive the sector and create sufficient jobs in the segment.
The pledge came during this year’s Nigerian Association of Small and Medium Enterprises (NASME) annual meeting held in Lagos.
According to Titi Osuntoki, who represented Hebert Wigwe, managing director/CEO, Access Bank plc, the bank is targeting to ensure that 96 percent of businesses in the country, which are MSMEs, contribute meaningfully to the Gross Domestic Product (GDP) as they do in the United States, Europe and China.
Osuntoki said the bank has $250 million fund for MSMEs from multinational agencies, while also managing other funds from the Central Bank of Nigeria (CBN), BoI and other partners.
“Getting what you need is not enough. Getting what you need at the right time is what matters most,” she told entrepreneurs at the event.
“We appreciate that SMEs are the future and as a bank we want to drive the sector,” she further said.
Osuntoki told entrepreneurs that they can have the best ideas in the world but may not attract funding interest if they do not articulate the ideas well and tell compelling stories that will attract the banks.
Isaiah Ndukwe, who represented Nnamdi Okonkwo, managing director/CEO, Fidelity Bank, said the bank is looking for MSME operators who will take advantage of the current devaluation of the naira to export, stressing that the bank has put structures in place to help SMEs raise their game.
“We identify SME clusters and come back and develop a programme for them. We did it in Aba, where w gave them N600 million,” he said.
On his part, Waheed Olagunju, executive director, small and medium enterprises, BoI, said the bank plans to support MSMEs in the value-addition industry with N300 billion in five years.
Olagunju urged operators of businesses in the MSME category to move into businesses they have passion for and identify areas the country has a comparative advantage in.
He identified five canons of credit as character, conditions, capacity, capital and collateral.
Olagunju further said that BoI, in collaboration with domestic and foreign development partners, manages more than 19 national development schemes and intervention funds on behalf of the private and the public, including foreign agencies. He identified some of the funds managed by the bank as N500 Bilion CBN Fund, N100 Billion CTG Fund, N18 Billion NAC Fund, N9 Billion MSME Funds in 18 States and N5 Billion Dangote SME Fund, among others.
Tokunbo Afolabi of the Bank of Agriculture, Agege branch, said the bank has SME loans, cooperative and farmers’ group loans, on-lending loans, agric micro loans and agriculture business loans, among others, that can help businesses in the small and medium category.
Wale Ogunsola, head, SMEs and venture capital at Nextzon Business Services Limited, urged MSMEs to tap into opportunities in Nigeria’s GDP as only 14 percent is made up of resources.
“There is a potential for 120 million Nigerians to move above the Empowerment Line and for 70 million to move out of poverty. This is a big opportunity waiting for budding entrepreneurs,” he said.
Earlier, Garba Ibrahim Gusau, president and chairman of the NASME council, said now that elections are here again, NASME is challenging the political players on their programmes and policies for the MSMEs at all levels of governance.
“To develop the MSME sector requires strong and supportive institutions and holistic infrastructural development as well as key and impactful sectoral intervention by Nigerian financial system, as a deliberate effort towards addressing the many years of neglect of the sector,” Gusau said, while urging banks and other institutions to join NASME in stimulating the segment.
ODINAKA ANUDU