The Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) in conjunction with the DfID-UK funded Growth and Employment in States (GEMS3) programme have developed a national framework for the accreditation of Business Development Service (BDS) providers in Nigeria, as well as a Credit Information Portal for Micro, Small and Medium Enterprise (MSME).
A statement signed by Head, Corporate Affairs Unit, SMEDAN, Ibrahim Mohammed, noted that the accreditation framework â€œis aimed at promoting the development of capacity, recognition and regulating the practice of Business Development Services in Nigeria.
It added that among other things, it would also lead to the establishment of a register of BDSPs which will include confirmed locations, websites and specialisations of the people behind each firm. It said this data would be available to banks, development finance institutions, microfinance institutions and MSMEs in general.
MSME sector is one of the most important sectors of the Nigerian economy. MSMEs currently represent 96 per cent of the businesses in Nigeria and account for 75 per cent of national employment. Of the 37.06 million MSMEs in Nigeria, over 36.99 million are micro-enterprises according to NBS/SMEDAN Report 2014. Growth in this sector is directly connected to growth in the economy as a whole and in the level of employment throughout Nigeria.
The statement however noted that this growth was not being realised and that research had revealed that there were major barriers responsible for this. The barrier, it noted, include 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
It said 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.
At the launch of the accreditation framework and re-launch of the Credit Information Portal recently in Lagos, the statement said, it was revealed that many MSME operators have had negative experiences when they procured the services of BDSPs resulting in lack of credibility in such services.
â€œAlthough, there were 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.
â€œThe launch event also featured a demonstration of the Credit Information Portal and an overview of the process of gaining access credit.â€
At the occasion, the Minister of State for Industry, Trade and Investment, Hajia Aisha Abubakar, 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 MSME’s access to finance and business development information which will lead to the provision of sustainable services and growth.
Earlier on, the Director General of SMEDAN, Dr. Dikko Umaru Radda, intimated the gathering of its agencyâ€™s commitment to improve the business climate in Nigeria and assured the gathering that the launch of the accreditation framework and the credit portal was to alleviate the challenges facing MSMEs.
He noted that the MSME sector urgently needs to move away from talk-shops to actions that will not only accelerate the growth of MSMEs, but make them globally competitive.
He stressed that lack of credible information on the sources and forms of business finance for MSMES was a major obstacle facing MSMEs which has undermined the growth and development of Nigeria.
Radda, who was pleased with the partnership with GEMS3 on the two initiatives, said these would change the landscape of MSME finance and competitiveness in Nigeria.