BY CHINYERE OBIORA, LAGOS – The Central Bank of Nigeria (CBN) says plans are on to develop a robust framework for improved credit to the Small and Medium Enterprises (SMEs) sector.
CBN Governor, Mr. Godwin Emefiele said that the idea to boost the level of government’s intervention in the sector, seen by many as having the capacity to generate employment and create jobs for the country’s teeming youth population.
Speaking at a strategy meeting with selected Development Finance Institutions (DFIs) and other stakeholders, on enhancing access to credit to SMEs in the country, Emefiele said the engagement with DFIs was due to failure by lenders to prioritize access to credit for SMEs.
According to him, government is concerned that the citizens are yet to feel the impact of the country’s exit from recession, a development that he attributed to lack of appreciable growth within the economy.
The apex bank governor said Mr President has mandated government agencies to come up with programmes that would have Nigeria and Nigerians at heart, adding that such programmes would target the grassroots and low income earners, especially in terms of granting access to credit to the rising number of SMEs.
Emefiele admitted that despite conscious effort by the CBN to improve certain parameters of the economy, lenders have failed Nigerians with their non-accommodating and distant attitude towards the SMEs.
Similarly, speakers at the strategy session were unequivocal in their submissions as they made attempts at offering solutions to address commercial banks’ non-readiness to reverse the worrisome situation.
The representative of the only commercial bank at the meeting, First Bank of Nigeria (FBN), said the challenge was traceable to the huge risk involved in granting credit to SMEs.
Narrating his sad experience, an Abuja based manufacturer told the meeting how a commercial bank, without any due diligence, shunned his request for a loan of N160 million on the account of his N200-million factory located in Kubwa, an outskirt of the Abuja metropolis.
Rounding off discussion at the forum, Emefiele said Nigeria must strengthen the Bank of Industry (BoI) to enable it compete favourably with Deposit Money Banks (DMBs).
A technical committee comprising the BoI, Development Bank of Nigeria (DBN), selected DFIs, Bank of Agriculture (BOA), and Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) has been constituted and mandated to submit its recommendations to the larger meeting within one week.
The Committee is chaired by Director, Development Finance Department (DFD), Central Bank of Nigeria, Dr. Mudashiru Olaitan.