He noted that funding is a critical component in MSMEs growth and survival, adding that lack of access to funding was making it difficult for them to develop their businesses and acquire better technologies for production, thereby stifling competitiveness.
“Specifically, we have well over 300,000 registered tailors and fashion designers in Aba, and more than 100,000 finished leather products producers in Aba. There are not more than three persons that have been able to access the MSME fund,” he said.
Noting that most of its members were not aware of the N220 billion MSMEDF, he lamented that with its huge membership base, the CBN had not deemed it necessary to approach it on how its members can benefit.
He said in most cases, officials of the CBN, BoI and other PFIs prefer to deal with the businesses directly — a situation that had further made the funds inaccessible to the small business owners.
According to Nduka, most of the owners of the businesses are not properly educated and usually rely on the assistance, advice and services of the chamber in order to provide the necessary documentation to access such funds.
Expressing his dissatisfaction at the secrecy surrounding the fund, Dikko Radda, Director General and Chief Executive Officer of Small and Medium Scale Enterprises Development Agency of Nigeria (SMEDAN), disclosed that the agency was aware that the CBN had set up the fund, but it was not involved, neither was it consulted in ensuring the success of the fund.
He said on his appointment, he asked a lot of questions as regards to the fund; because he believed that it was necessary that if there is such money meant for MSMEs in the country, there should be collaboration with SMEDAN, being an agency of government that is in charge of MSMEs development in the country.
Radda argued that SMEDAN should have played the role of being a referral body, because it has more knowledge on the MSMEs in all the states of the federation than any other body.
He added that SMEDAN should have played a monitoring role and also provides business development support to the beneficiaries because that is its mandate.
He faulted the CBN for not involving SMEDAN in the programme, criticised the use of consultants for the programme, a role, which according to him, could have been given to SMEDAN.
Radda also added that he had held several meetings with the CBN, through the Office of the Secretary to the Government of the Federation, which led to the setting up of a committee to work out modalities on how SMEDAN could be included in the programme.
However, he lamented that for over one year since the committee was inaugurated, nothing had been heard from the CBN on the issue, noting that SMEDAN had written several letters to the CBN to that effect, without success.
Moreover, the refusal of the CBN to publish the names of those it claimed were beneficiaries of the Fund has raised further doubts about the integrity of the bank and the fund.
The CBN stated that information about the beneficiaries would be obtained by sending a mail to its dedicated help desk, ‘contactcbn.gov.ng’, where it said relevant staff would be available to provide responses.
Taiwo Maja is the chief executive officer of Smart Space System Limited, a technology training company based in Lagos.
Speaking on access to funds in the country, he said processes of obtaining the loans are cumbersome and serve as barriers to accessing them and that has stopped his company from trying.
“We are focusing on what we are doing and hope that something will happen some day,” he said in an with interview INDEPENDENT.
Suashi Ini-Usoro is the founder and managing partner of E-business Hub Nigeria, a company that trains entrepreneurs on how run their businesses successfully.
She said companies should study their businesses properly and determine the type of external funding they require.
She said: “If you are a small business that has a very high monthly turnover, and you will want to scale up to continue to meet the demand of your customers, by all means take loans and try and access low interest loans like the Lagos State Employment Trust Fund loan or from a few other institutions that give low interest rate loans. But if your business does not have a high monthly turn over, I will advise that you either wait or try and access grants or angel investors for your business or venture.”
However, she said many need the help of an investor if they want to diversify or expand their businesses especially when their financial standing cannot really give them the desired venture.
She argued that growing a successful business is not just about collecting any fund that is offered to the company as an investment, adding that there is need for business owners to be wise and smart, taking into cognisance what the investment would cost them in the short and long-run. It is a decision the organisations have to make.
She stated that whatever way a business owner chooses to grow his business, it is expedient that before they accept an investor proposal, they should carefully go through it in an objective manner, taking into account the pros and cons. She added that businesses should not loans that would be a burden they cannot service, saying that this may lead to creating financial challenges for the business.
According to Adefemi Oluyemi, a Lagos-based small scale farmer, due to the high risks inherent in the agricultural sector and because farmers are unable provide material guarantees, producers have great difficulty in accessing funding to invest in their farms.
He said this has slowed the pace of agricultural modernisation through the purchase of production equipment that is essential to farmers so that they may increase their income and contribute to their countries’ food security. He called on government and financial institutions to make special funds available so that farmers can access them easily.
For Olawale Akinpelu, a Lagos-based consultant, what small business owners’ need is not loans but grants. According to him, taking loans by small business owners in the country put a lot of pressure on them and lead to stifle.
He posited that the Nigerian business environment is harsh and makes it difficult for businesses to survive. He called on government to set up agencies that will help business owners to access grants and training that will make their businesses to be sustainable.
Financial institutions have been called upon to collaborate with Small and Medium Scale (SMEs) business operators in the country in order to assist them to grow their business and assess the N220bn intervention funds granted them by the government.
Mr. Tunji Ope, an SME consultant in an interview with our correspondent, said that unless the financial institutions work with the SMEs, they would not be able to assess the N22bn intervention funds the Federal Government granted them some few years ago.
Ope decried that many of the financial institutions in the country show lackadaisical attitude towards the plights of SMEs, which he said is an integral part of any economy.
For the SMEs to assess the funds, he said the banks should change their structures from just granting of loans, but to also participate in the usage of such funds to beneficiaries and ensure that the funds are utilised for that purpose.
According to him, many of the financial institutions in the country have little or no understanding of how SMEs operate, stressing that different stringent measures are always attached before SMEs could assess funds.
He added: “If any financial system is going to consider an SME for funds, they are going to look at two basic things; financial statement and bank statement, apart from the full understanding of the business.
“Also, the issue of tax compliance would be looked into. If any financial institution is going to look at granting loan to the SMEs, they are going to look at their taxes and financial records and bank statements. If they are not able to provide all those documentations, there is no financial institution that will support them to facilitate the loans.
The post Tales Of Disappointments Trail MSMEDF appeared first on Independent Newspapers Nigeria.
Tales Of Disappointments Trail MSMEDF
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