CBN, BoI, others seek measures to tackle SMEs’ financing gap
The Central Bank of Nigeria (CBN), Bank of Industry (BoI) and members of the African Management Services Company (AMSCO) have unveiled measures to address financing challenges affecting enterprise growth in the country.
Specifically, the CBN stated that efforts are underway to unveil a partnership with the International Finance Corporation (IFC) as well as other Development Finance Institutions in the country in addressing criteria and requirements for funding small businesses.
Speaking at a conference themed, “Accelerating Enterprise Growth and Competitiveness in Nigeria- Building Capacity for sustainable Development”, in Lagos, yesterday, the Governor, CBN, Godwin Emefiele, who was represented by a Director at the bank’s Development Finance Department, Dr. Mudashir Olaitan, noted that the bank had introduced a lot of facilities to aid sustainable growth in the real sector.
He stated that N1.2 trillion had been earmarked for funding under various schemes for industrial growth.
Emefiele underscored the crucial role that Nigerian enterprises play in the growth and sustenance of the Nigerian economy.
He called on various stakeholders to take an active role in capacitating the private sector, saying: “Promoting increased foreign direct investment and other capital inflows through policies that will attract foreign investors and strengthening the DFIs to promote affordable and long-term finance is required.”
The stakeholders noted that Nigerian businesses, particularly Small and Medium Enterprises (SMEs) require the capacity to engage at global levels.
According to them, challenges such as access to finance, shortage of skills, market access and a general enabling environment hinder their development and global attractiveness, therefore necessitating the conference to generate home-grown solutions to address the challenges and open up opportunities for dialogue and collaboration with key players.
Executive Director, Small and Medium Enterprises, Bank of Industry, Waheed Olagunju, while speaking on measures to improve access to finance said: “The most important thing is that we are now beginning to address the demand side of the topic because over the years, we have been approaching things from the supply perspective; throwing money at the problem without really thinking of the capacity of SMEs to attract funds.
The financing value chain needs to be improved upon in the country. A lot of SMEs would do better with funding from private equity firms and venture capitalists. It is when the SME is strong and has a track record that it can then begin to talk about credit. Because when you want to take a facility from a financial institution, we need to see your track record like how have you managed your company for the past 2-3 years.
You must have the character of a business promoter, a business plan, a business model and skills to manage the business.
It is not all the funds you need that would be supplied by the financial institution; you need to make your own commitment as well. You need to look at the condition of the entrepreneur and the environment you wish to operate. Similarly, the capacity of the entrepreneur must be assessed as well as how the business can generate the required cashflow to service it. You heard the Central Bank saying they are trying to put in place the national moveable access registry as from next year in order to enhance the ease of access to credit.
At BoI, we have in recent times, tried to improve access of the public to our services. We used to have seven offices across the country in the past but we have now doubled this to 14. We have now established state offices and we are doing more; we are not stopping at those 14. We know it is a large country, the population of about 170 million; we are trying to leverage achievement in the ICT space to deliver our services.
We have launched an SME app and what that means is that we are riding on the 150 million GSM subscriber base to ensure that every GSM subscriber in Nigeria can download BoI SME app, while you can also apply for BoI services online via our online portal, as well as track your loan application”.
Chief Executive Officer & Managing Director for AMSCO, Paul Malherbe identified the three key issues that require special attention for Nigeria to reach its private sector development agenda to include; a change of focus from youth education to youth entrepreneurship, increased interventions that promote gender empowerment and directly developing SMEs with limited skills.”
“Most Africans SMEs are faced with growth challenges because there is a dependency on large companies or cooperates to educate them. Our business landscape can only improve if we don’t wait but rather place our lens on collaborations to develop human capital at SME level, matching the right skills to the right jobs, training the management of those businesses and helping them access financial capital to reinvent themselves, this is our core focus at AMSCO” said Malherbe.