The founder and Chief Executive Officer of H. Pierson Associates Limited, Eileen Shaiyen has identified seven critical high-impact areas that Nigeria must focus on to stimulate economic growth.
She made this remark at the recent annual lecture of the Chartered Institute of Bankers of Nigeria (CIBN) where she was among the panelists.
Joining other stakeholders in the finance sector to discuss the theme, â€˜Of Banks and Bankers: Finance and the Challenge of Economic Devlopment[si1] in Nigeria,â€™ as delivered in the lecture by the former deputy governor of Central Bank of Nigeria and presidential aspirant, Prof. Kingsley Moghalu, Shaiyen argued that a large population of Nigerians reside in the rural areas.
Thus, a large chunk of the labour force is employed by the Micro, Small and Medium-size enterprises (MSMEs).
â€œMSMEs contribute probably about 90 percent to employment and 50 percent to GDP. With these statistics, how can we make great impact towards achieving economic development?
â€œFor us to achieve this, we have to look at the MSMEs because of the wide role they have and the fact that we need to cover the majority of over 200 million people who are not living in Lagos.â€
She further listed other priority areas which the government should focus on to include strong consumer lending, funding to health, education, agriculture value chain, as well as women and exports.
According to her, the major type of funds needed by these high-impact areas for economic development is â€˜patient moneyâ€™ which largely includes low-cost revolving credit and then capital, both of which should be readily available on a wide-scale, especially in the hinterlands.
While recognising the role of commercial and merchant banks in the country, Shaiyen however expressed doubt that they can deliver effectively on the mentioned areas.
â€œWe need a change of positioning in which microfinance banks and similar grass-root focused and capital-providing entities, begin to take the front row in our funding and financial sector discourse and strategies,â€ she stated.
Using India as a case study, she pointed out that the Asian country has 93,550 rural cooperative banks, 1,589 urban cooperative banks, several cooperative credit institutions and 56 regional rural banks in additions to its regular commercial and foreign banks
â€œMost importantly, the financial ecosystem in India, significantly elevates these grassroots financial institutions to a position of primary and strategic focus and impact assurance and not as â€˜third cousinsâ€™ to the commercial banks.â€
She also urged the CIBN to deploy its research and advocacy facilities to develop an index to track the impact of the various categories of banks on economic development.
â€œThe goal will be to push more support and appropriate positioning towards providers of widespread, rurally accessed patient money.â€
Also speaking at the event, the Chairman, Nigerian Economic Summit Group, Kyari Bukar, who also chaired the lecture, emphasised the need to give more support to funding sources for start-ups such as Venture Capital Funds and Angel Investors.