Osun Guber: A’ Court Decides Adeleke, Oyetola’s Fate Friday
Ondo Monarch Congratulates Tinubu, Says He’s Worthy Yoruba Son
Kwara PDP House of Assembly Candidates Vow to Challenge Election Outcome in Court
SMEDAN to Float Microfinance Bank to Ease Lennding to MSMEs
- Says new policy framework underway
By James Emejo
The Director-General, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Dr. Umar Dikko Radda, Thursday said efforts were ongoing by the agency to establish its own microfinance bank (MFB) to cater for financial needs of Micro Small and Medium Enterprises (MSMEs) in the country.
He also disclosed that a new MSMEs policy had been finalised and currently awaiting the approval of the Federal Executive Council (FEC).
Speaking at a forum for industry correspondents in Abuja, he explained that the proposed SMEDAN MFB will “enable the Nigerian MSMEs have direct access to credit with very simplified and modern means of achieving that.”
The DG pointed out that the stringent requirements put in place by commercial banks as well as high interest rates had made it difficult for small businesses to meet most of the requirements.
He said he was hopeful that the proposed bank will be launched in 2021 adding that it is currently undertaking a visibility study as well as working to meet all the requirement by the Central Bank of Nigeria (CBN) in order to get a temporary license to operate the MFB.
He said its version of MFB is similar to the NIRSAL MFB, which was jointly established by the apex bank and the Bankers’ Committee with the aim of providing cheap credit to MSMEs.
Dikko-Radda said:”As are all aware, the requirements put in place by most of these banks are requirements that would not allow not only MSMEs but large businesses to meet most of these requirements.
“And I think interest rate is unbearable because you have an interest rate of over 20 per cent. What kind of business are you going to do to produce what you would produce and earn a profit that would be able to offset the interest rate and and then be able to make up something for your family.
“It’s really very difficult and that’s one of the major challenge and we are working hard to ensure that we establish a microfinance bank that would address the challenge.”
He further explained that the proposed institution will be jointly owned some MSMEs organisations and cooperatives that will be represented on the company’s board.
He said, “Together we will build up a microfinance bank with the kind of requirements needed to meet up the challenge of accessing credit facility.”
However, he said the major changes in the MSMEs policy centered around the nomenclature, classification and the definition of MSMEs.
The SMEDAN boss said:”You know initially we had the definition of MSMEs based on asset and labour. But now because it’s no more visible – you will see a one-man business but has a turnover of about N100 million or N1 billion. So we are classifying it now based on the turnover as well as the number of people employed.”
He pointed out that SMEDAN remained the custodian of the policy on MSMEs, stressing that the SMEs policy was first developed in 2006, with the support of the UNDP and other development partners.
He said the policy was reviewed 2010 and later in 2018.
“And then we’re doing it again. We have concluded everything about the policy, we have done the validation, we have received input from all the stakeholders in the MSMEs ecosystem in the country and we validated it and it was presented to the Federal Ministry of Industry, Trade and Investment for the Federal Executive Council (FEC) to give approval.”