The Director General, Small and Medium Enterprise Development Agencies (SMEDAN), Charles Odiii disclosed that Sterling Bank had provided N5billion as loan for Small and Medium Enterprises (SMEs) to upgrade their businesses, but only N250 million has so far been disbursed across the 36 states of the federation including the Federal Capital Territory, FCT.
The N5 billion is not a grant but a loan to be accessed and paid back. The information was disclosed during the signing of the memorandum of understanding (MoU) between the two organisations SMEDAN and Sterling Bank. Presently a lot of small businesses are still finding it difficult to access this loan due to their lack of capacity and non-keeping of business records.
Odii said the agency is experiencing a stunted disbursement of these loans which was not expected at all as he explained that the money is available but cannot be accessed due to lack of capacity.
The Director-General who spoke with The Nation in Abuja disclosed that SMEDAN is working through its business clinics to train more people and licence them to increase their capacity to unlocking their businesses.
He said: “We are experiencing stunted disbursements in these loans because it is not going the way we expected, the small businesses do not have the right capacity and again most of the small businesses are run without records. We are working through our business clinics to train more people and licence them to increase their capacity to unlocking their businesses.
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“At Q1 we have so far trained 12000 business owners through some of our partners and we plan to do more to equip the capacity of our businesses. For the loan assessment, the state that really did well in the area of loan acceessment is Katsina State.
“The present governor of Katsina State who was a one time Director-General SMEDAN, Umar Dikko Radda leveraged the information and ensured the state’s SMEs benefitted from these loans; 204 from the state accessed the loan. Katsina State alone was able to do about N200 million in the disbursement.
“We have disbursed approximately N250million across the 36 states of the federation including the federal Capital Territory FCT which is only five per cent of the funds available. We have also signed a MoU with other state governments and BoI, so we can disburse more loans to small businesses.”
Odii added that SMEDAN signed a MoU with Katsina to the tune of N1 billion for SMEs in the state stating that the governor is putting in a lot efforts to help small businesses access the fund. “We created the SMEs data bank, where small businesses have to register so we can know them, understand their track record and give them finances,” he said.