MSMEs task new CBN governor on N220bn development fund

Micro, small and medium entrepreneurs (MSMEs) in Aba, the commercial hub of Abia State, have appealed to the new governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, to quickly approve the release of the N220 billion MSME development fund to boost the sector.

They argue that the high interest rate regime of the commercial banks has taken a toll on the sector’s activities, stressing that commercial bank loans come at a cut-throat interest rate and eat deep into the profit of sector operators.

They also argue that continuous involvement of commercial banks in micro-finance business will scuttle Federal Government’s plans to empower the micro, small and medium entrepreneurs in the country. It will also hamper Federal Government’s poverty alleviation programme, geared towards economic stimulation through the empowerment of rural dwellers.

Consequently, the African Association of Small and Medium Enterprise (AASME) in conjunction with other SME groups in the area appeals to President Goodluck Jonathan to advise the CBN to release the fund through microfinance banks.

The group in a letter to the president, signed by Darlington Kalu, president, AASME, which was also made available to BusinessDay, decries the attitude of the CBN in releasing the MSME development fund.

“It will be like Mr. President’s support for MSMEs in Nigeria is being undermined by CBN officials. We therefore urgently call on the CBN to quickly start effective disbursement of the fund,” according to the letter.

Kay Ijomanta, managing director, Merchant Microfinance Bank Limited, observed that commercial banks involvement in microfinance activities would make it difficult for those at the grassroots to benefit from the MSME fund.

According to him, all the commercial banks now have products targeted at SMEs; however, these loans come at very high interest rates.

Microfinance banks were established by the CBN as a channel to stimulate economic growth, through the empowerment of MSME as well as the rural dwellers involved in agriculture, manufacturing and other economic activities.

They are also to disburse funds and other loans meant for this group of people, because of their closeness to the group, consequently funds collected for the MSMEs are supposed to be channelled through MFBs to the beneficiaries.

GODFREY OFURUM