SMEDAN, GEMS3 collaborating to drive MSMEs development in Nigeria
The micro, small and medium enterprises (MSMEs) sector is one of, if not the most important sector of the Nigerian economy.
MSMEs currently represent 96 percent of the businesses in Nigeria and contribute 7 percent to the national employment.
Of the 37.06million MSMEs in Nigeria, over 36.99 million are micro-enterprises, according to the NBS/SMEDAN Report 2014. Growth in this sector is directly correlated with growth in the economy as a whole and in the level of employment throughout Nigeria. Unfortunately, this growth is not being realised and research has revealed that there are three major barriers causing this.
These are: very low access to affordable finance, poor access to Business Development Service Providers (BDSPs), lack of business experience, inadequate infrastructure and a corresponding high cost of doing business.
To address some of the challenges above, the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN), which is by law charged with the responsibility of designing policies to support the MSMEs sector in Nigeria, in conjunction with the DFID-UK funded Growth and Employment in States (GEMS3) programme, has developed a national framework for the accreditation of Business Development Service (BDS) providers in Nigeria, as well as a Credit Information Portal for MSMEs.
The Accreditation Framework is aimed at promoting the development of capacity, recognition and regulating the practice of Business Development Services in Nigeria. Among other things, this will lead to the establishment of a register of BDSPs, which will include confirmed locations, websites and specialisations of the people behind each firm. This data will be available to banks, development finance institutions, microfinance Institutions and MSMEs in general.
The Credit Information Portal is a web-based platform that hopes to bridge the information barriers faced by MSMEs in accessing finance and creating new channels of engagement for micro-finance and commercial banks by providing a streamlined and simplified source of loan information for MSMEs and assisting the process of securing credit for personal and business needs. The portal can be accessed via the URL:http://www.smedan.gov.ng/cip.< http://www.smedan.gov.ng/cip>
At the joint launch of the accreditation framework and re-launch of the Credit Information Portal recently in Lagos, it was revealed that many MSME operators have had negative experiences when they procure the services BDSPs resulting in lack of credibility in such services. Although, there are several constructive activities being carried out to improve the market for such professional services, there is no uniformity or standardisation of service provision, mainly due to the lack of a robust framework to regulate and standardise the activities of the BDSPs in Nigeria. The launch event also featured a demonstration of the Credit Information Portal and an overview of the process of gaining access credit.
At the occasion, Aisha Abubakar, Minister of State for Industry, Trade and Investment, promised the Federal Government’s full support and commitment to the programme. She further commended the initiators of the programme because of its impact to accelerate MSMEs’ access to finance and business development information which will lead to the provision of sustainable services and growth.
Earlier on, Dikko Umaru Radda, Director General of the Small and Medium Enterprises Development Agency of Nigeria, SMEDAN, had intimated the gathering of its agency’s commitment to improve the business climate in Nigeria and assured that the launching of the accreditation framework and the credit portal is to alleviate the challenges facing MSMEs in Nigeria. He noted that the MSME sector urgently needs to move away from talk-shops to actions that will not only accelerate the growth of small businesses, but make them globally competitive. He stressed that lack of credible information on the sources and forms of business finance for MSMES is a major obstacle facing MSMEs, which has undermined the growth and development in Nigeria.
Radda, who was pleased with the partnership with GEMS3 on the two initiatives, enjoined the public that these would change the landscape of MSME finance and competitiveness in Nigeria.
Ibrahim Mohammed, head of corporate affairs at SMEDAN.