Banks Urged to Diversify Portfolio, Fund MSMEs


Obinna Chima

The Central Bank of Nigeria (CBN) has advised banks and other financial institutions to diversify their portfolios and lend more to the Micro Small and Medium Enterprises (MSMEs) sector which is seen as the backbone of the economy.

CBN Governor, Mr. Godwin Emefiele who said this at a three-day Financial Institutions Training Centre (FITC) training programme on “Movable Asset Lending for Financial Institutions in Nigeria,” in Lagos recently, said access to finance was essential for private sector growth and development in any economy and it remains a major constraint to all developing economies like Nigeria.

Emefiele, who was represented by the Registrar, National Collateral Registry (NCR), Mainasara Muhammad, said in addressing this financing gap, the CBN collaborated with the World Bank / International Finance Corporation (IFC) Group, to established the Secured Transactions and National Collateral Registry.

The registry, he said, will improve access to finance for MSMEs while maintaining a strong prudent lending policy and promote Sound Financial System in Nigeria.

Also speaking at the event, Managing Director, FITC, Lucy Surhyel Newman, said the IFC and CBN have continued to support FITC in its plans to build competencies in the financial sector. She said that over the recent past five years, IFC has contributed immensely to the competencies of bank directors, FITC staff and associates in terms of corporate governance, board leadership, as well as the emerging collaboration on Environmental and Social Risk Management (ESRM).

“The movable asset financing course, is targeted at heads of credit and risk management; loan portfolio managers/officers, heads of SME Lending, heads of collection/enforcement, loan recovery manager/officers, heads of legal departments, as well as those transiting to such roles in Deposit Money Banks (DMBs), Development Finance Institutions (DFIs), Primary Mortgage Institutions (PMIs) and Infrastructure Banks (IFBs),” she said.

Newman said most stakeholders in the Nigerian financial system and socio-economic studies recognised that MSMEs, are critical to socio-economic development and contribute over 60 percent of GDP in emerging economies.