The Nation Newspaper

Tag: MSMEs

  • N20b lifeline coming for Anambra MSMEs

    The Anambra State Government has said it is targeting N20 billion to boost Micro, Small and Medium Enterprises (MSMEs).

    Anambra State Small Business Agency (ASBA) Managing Director, Mr. Clement Chukwuka, who who made this known in Awka, the state capital, said the agency targets N20 billion in the next seven and half years with the hope of generating over N3 billion this year to assist entrepreneurs.

    According to Chukwuka, the agency was already working with the Central Bank of Nigeria (CBN) to raise more funds.

    “In the past 19 months, the agency had so far funded in excess of 15, 000 people directly in the micro credit schemes and close to 200 for the Small and Medium Enterprises (SMEs), which had further created chains of employment,” he said.

    Chukwuka added that the agency had also put in place shoe manufacturing cluster in conjunction with the Standards Organisation of Nigeria (SON) with over a thousand shops built with little funds. He said they are expected to begin manufacturing of shoes for export.

    Apart from providing finance to entrepreneurs at nine per cent interest rate, the ASBA boss said the agency was also mentoring and planned to open up opportunities for fashion designers, mechanics and artisans this year.

    He said since June 2015, the state government in conjunction with the CBN had disbursed about N2 billion loans through the agency to revive moribund industries.

    While reiterating the state’s commitment to remain the choice destination for commerce in the country, Chukwuka said the agency also plans to establish ASBA Business Academy.

    The Academy, he said, would train and certify artisans with the state Ministry of Science and Technology. “Our aim is to ensure that paper qualification becomes a thing of the past because we want people to make a living despite the economic recession,” he said.

    ASBA is a state-owned development financial institution created to cover areas of industrialisation, value added chain programmes, artisans, science and technology, oil and gas, and manufacturing sectors.

    “Major Anambra rice millers and the clusters that export vegetables from the state overseas are funded by the agency to boost the agricultural sector,” the ASBA helmsman said.

    He added that micro-credit entrepreneurs, who applied for funds received between N1, 000 and N500, 000, while between N5 million and N50 million was approved for successful applicants under the SMEs programme.

    Chukwuka stressed that ASBA had impacted over 60, 000 businesses directly and indirectly in the state, adding, however, that the agency had strict policy for recovering every loan.

    He also said Governor Willie Obiano  was determined to encourage investments and build institutions that would not only promote MSMEs, but outlive his administration.

  • SON’to support 37m MSMEs

    SON’to support 37m MSMEs

    The Minister of State, Ministry of Industry, Trade and Investment, Mrs. Aisha Abubakar said the establishment of a functional National Accreditation Body would provide the requisite infrastructure to support the growth of the over 37 million Micro, Small and Medium Enterprises (MSMEs) in the country.

    Mrs. Abubakar, who  made this known at the 7th African Accreditation Cooperation (AFRAC) General Assembly meeting in Abuja, said the benefits of the services to MSMEs cannot be over emphasised since they will enhance the competitiveness of their products, thereby availing them unfettered access to both domestic and international markets.

    She said, “This is the surest way the speedy economic development of the country can be guaranteed given the fact that SMEs form the bedrock of the economic development of most countries.

     

  • BoI disburses N5.6b to MSMEs

    BoI disburses N5.6b to MSMEs

    The Bank of Industry (BoI)  disbursed N5.6billion to Micro Small and Medium Enterprises (MSMEs) in the country last year. the Acting Managing Director, Waheed Olagunju, has said.

    Waheed, who spoke at the Insurance Industry Consultative Council, National Insurance Conference 2016, with the theme, ‘Expanding National Resources and Infrastructure in Challenging Times,’ in Abuja, yesterday, promised to double the figure this year.

    He said: “In 2015 we disbursed N5.6billion to MSMEs which was the highest annual disbursement ever in the history of the bank. In previous years the lending was N1.7billion.

    “In 2015 we were able to increase to about 205 percent. This year, we are expected to double that which is why we are embarking on all these initiatives so we can support as many Nigerians as possible, especially the youths to enable them access BoI’s facilities.

    “Manufacturing and industrialisation is what makes the major difference between the rich and the poor. There is no way we can make major progress without infrastructure, especially in manufacturing, solid minerals and agriculture. For us to embark on infrastructure projects, the project must be able to pay its way; there should be good demand and viable option; there must be effective purchasing power.”

    According to Olagunju, Nigeria’s 180 million pouplation could either be an asset or a liability, adding that if it is deployed to productive use, it becomes an asset but if it is the contrary, then it becomes a liability. He said with the 774 local government areas, each of the local government has solid minerals and agricultural resources.

  • ‘MSMEs are vital tools for economic transformation’

    ‘MSMEs are vital tools for economic transformation’

    Lagos State Commissioner for Commerce, Industry and Cooperatives, Rotimi Ogunleye, in this interview with Group Business Editor SIMEON EBULU,  argues for the positioning of the Medium Small and Micro Enterprises (MSMEs) considering their strategic roles in economic growth. This, Ogunleye said, was why the government held a trade fair to showcase MSMEs’potential.  

    Earlier this month, the Medium Small and Micro Enterprises (MSMEs) fair was held in Lagos. How important was this fair for the MSMEs sub-sector of the economy?

    The importance and rationale for the fair was to give the MSME platform the opportunity to exhibit their goods; this is to help open up opportunities for the sub-sector, and invariably help eliminate the issue of a mono product economy that we have. We have come to realise that Nigerian economy has to be diversified. Because of my experience and many years of study, I know that MSME sub-sector is a vital tool for economic transformation and development. So, we came up with this idea that the MSME should be given a platform to display their goods so that people could see them and by that, they could be assured of patronage. In Lagos alone, we have over three million MSMEs. Governor Akinwunmi Ambode gave us the approval to go ahead and we decided to hold the fair for them between May 3 and 8, this year, to display what they are producing.

    Can you say that you have achieved your objective of organising the fair?

    Many of the operators in the sub-sector were happy that the fair held; over 125 people came to participate in the fair to exhibit their products. If not for the space, they would have been more than that and we could have recorded thousands of them at the fair. That is why our governor said that the second edition should be done in a bigger space. The patronage and the response was very encouraging and it shows that operators in this sub-sector were waiting for the opportunity to expose their goods to the public. One thing about this event is that we really partnered with some private sector operators such as the online e-commerce operators, who gave incentive to the SMEs by listing their products on their e-mall platform. This means that, we have achieved what we set out to achieve from the fair.

    The visibility of operators and their accessibility to the market matters a lot, including patronage. Quite a lot of them told us during the fair about the benefits they got in terms of visibility from the people that came to the fair. This is because many of them did not know before that one could produce good soap from carrot that one could bath with. They did not also know that one could recycle used sachet water nylon into very good nylon bag that could be used as containers. They all saw those things at the fair and they were very happy.

    How much was paid by participants to  showcase their products at the fair?

    We did not charge any amount. It was free. Many people came at the latter end of the fair. The ministry is meant to assist them to access market and draw patronage from people. So, if the fair is able to do these for them, it will boost their business and make them to sell their product. Many of them made a lot of contacts for sale and supply of goods. I am sure, with this, they will produce more and get market accessibility so that they could employ more hands. That is our aim and that is why we did not charge participants any money for putting up a stand at the exhibition ground.

    When will the next edition hold?

    The next one will come towards the last quarter of this year. From the response we got from this first one and the calls we received, we have seen that many people are really interested in the fair. People were happy that we came up with this viable option. We expect greater participation in the next one coming up later this year.

    A lot of business deals were done and that is what we set out to achieve. By this, many of our countrymen will be able to patronise many of locally produced goods. This will, in effect, lead to reduction of our import dependent attitude because our tilt towards foreign goods and foreign items has been the bane of this economy. This has subjected our currency, the naira, to a lot of downward pressure, thereby making it to fall ceaselessly against the dollar. If we look inwards and embrace backward integration by using our locally made goods, this pressure could be reduced drastically. Also by patronising the SME operators, they will be able to produce for exports and this will lead to a win-win situation for the country.

    What are the policies being put in place by your ministry to assist the SMEs that participated in the fair?

    I have told you about the platform provided by Konga-the e-commerce operator that listed them on its platform. This is to make it possible for any interested party to see their products and make order. From us in government, we have incentives for the operators such as the N25 billion soft loan facility packaged to assist the SMEs. Out of this, N6.25 billion will be put in the care of the board of trustees yearly for the SMEs to access at three per cent interest rate, and it is the cheapest you can get anywhere.

    We have also spoken to a number of financial institutions for conventional bank loans. They have their own excuses because they have the minimum rediscount rate (now monetary policy rate) at 11 per cent. They will add their own margin which does not allow them to come below the MPR rate. But we have also spoken with the Bank of Industry (BoI) because they have five per cent interest rate which we have encouraged the SMEs to look out for. Incidentally, BOI was also at the seminar to display their products. Their forms were available and they attended to people at the fair. I equally know that at the level of CBN, there is a pool of fund for the SMEs. Conventional banks should look at this in conjunction with the CBN so that we give loans to the SMEs at a lower rate. We should not use the market rate for the SMEs because if we want to grow the economy and diversify it, we must develop the SME. The fair done by the Lagos State has shown clearly that the Nigerian creative spirit is high. Our people have the creative ability to produce most goods locally. The skill could be low because of lack of fund. This could have enabled them to produce on a larger scale. Financial institutions should assist the SMEs.

    I was reading a story recently that there was SME intervention fund in CBN that was grossly under-utilised. Why should that be when we have a lot of SMEs looking for funds to develop products? If we want to assist the SME, we must make sure that interest rate on their loans is not more than five per cent. That is why Lagos State has used the benchmark of three per cent interest rate for the SMEs and I believe that appropriate policy should be put in place to allow interest rate come down for the SMEs like what is being done by the Lagos State government. Gone are the days when people used to say that SMEs will only collect money to marry wives. Now, that mindset should be dismissed and we should do away with that prejudices. SME operators are serious minded people and they have shown that at the last Lagos fair.

  • How govt will grow MSMEs, create friendly business environment

    How govt will grow MSMEs, create friendly business environment

    The Federal Ministry of Industry, Trade and Investment has prioritised support for Micro, Small and Medium Enterprises (MSMEs), the Minister, Dr. Okechukwu Enelamah, has said.

    He said because MSMEs constituted over 60 per cent of the Gross Domestic Product (GDP), his ministry was determined to support the sector to make it thrive.

    According to him, the support entails training, capacity building and ultimately, financing.

    Enelamah said this at the weekend while delivering the keynote address at the Fourth Great Place to Work Awards in Lagos.

    He said the ministry “will also seek to proactively attract investment both local and international.”

    H reaffirmed the ministry’s commitment at creating jobs and boosting productivity by fostering an enabling environment that supports the private sector and other stakeholders in creating jobs for the teeming population.

    Enelamah said: “This enabling environment would include consistent policies that would engender trust and help people plan their businesses better; corporate infrastructure and physical infrastructure such as power, roads, and rail etc. And of course, other infrastructure, which deals with institutions, rule of law, policies that you can rely on to build your businesses.”

    He also said the ministry’s commitment to creating an enabling environment involves progressively making it easier for businesses to operate.

    “We do not believe that the tag or the saying that Nigeria is a difficult place to do business, which is something we talk about quite often, is a good one,” he said.

    The Minister explained that his ministry will do this by implementing policies that remove the bottlenecks and roadblocks that make business hard or slow in Nigeria or unfriendly.

    “We want to create a friendly business environment. And I believe it can be done by a collective effort,” he said.

    Enelamah noted that having served in the private sector, one of the things that has become obvious is that creating a friendly business environment has to be a partnership of all the major stakeholders.

    He further said to boost productivity, his ministry plans to introduce sector policies that encourage local manufacturing and production of goods.

    “Our people are resourceful. When Nigerians go abroad they do very well. There must be something we can do better in our environment and that is something we are committed at doing,” he said.

  • Banks seek CBN’s guarantees on N220b MSMEs’ fund

    Banks seek CBN’s guarantees on N220b MSMEs’ fund

    •FirstBank charts way forward for SMEs’ growth 

    Deposit Money Banks (DMBs) have tabled before the Central Bank of Nigeria (CBN), a proposal asking the apex lender to guarantee commercial bank loans to the Micro, Small and Medium Enterprises (MSME) operators.

    The guarantee, according to Deputy Managing Director, First Bank of Nigeria Limited, Gbenga Shobo, would apply only to customers accessing loans from the N220 billion MSMEs’ Fund.

    Speaking at the 2016 Entrepreneurship Development Centre/FirstBank SME Breakfast Series tagged: The Economy and You!, he said banks needed CBN’s guarantees to lend the funds to Small and Medium Enterprises (SMEs).

    He said the practice is already being implemented in other countries, and had helped to boost lending to small businesses in those countries.

    “These are one of the suggestions on the table. There many suggestions, but they picked this particular model. They are worried that many borrowers look at the loans as part of national cake. You go there, take the loan and refuse to pay. We know that if the CBN guarantees the loans, even if the customer doses not pay back, the CBN will pay. It has been done in other countries and we have seen the impact on SMEs’ lending. We must all find a way whereby we make it work,” he said.

    The MSMEs’ Fund was launched by the CBN as part of its developmental role and mandate of promoting a sound financial system. This was in recognition of the significant contributions of the MSME sub-sector to the economy. It said the sub-sector is characterised by huge financing gap, which hinders the development of MSMEs.

    Shobo urged SMEs’ operators not to be discouraged by the ongoing economic challenges facing the country. He advised the operators to identify key sectors of the economy where opportunities for businesses are available.

    “The economy is facing some challenges, but opportunities still abound. Our population of about 186 million means that if provide services that we need internally, we can still make profit,” he said.

    He said Nigeria’s population is a huge business opportunity that should interest discerning entrepreneurs, hence the need to carefully study and understand Nigeria business environment.

    Shobo said FirstBank will continue to support the SMEs because of the critical role they play in creating jobs and economic development for the country. He disclosed the level of non-performing loans in the banking industry is also a disincentive for new lending. “As banks explain the bad loans in their books, they will be less ready to give out new loans. That is why SMEs operators should always ensure they repay back their loans at the agreed time,” he said.

    He identified the agricultural and educational sectors as key segments of the economy where huge opportunities abound. “We have been lending a lot to private schools. It is an industry that people haven’t found out earlier. I want the SMEs to embrace the new technology that is driving today’s businesses,” he said.

    Chief Economist, FirstBank, Ifeanyi Uddin, said since Nigeria’s population is largely youthful, there are huge investment opportunities in manufacturing of goods that are predominantly consumed, and service offerings that are preferably accessed, by the youths.

    “Clearly, the business environment in Nigeria is challenging, but there are hopes that with right leadership and reforms, the environment will soon improve. Sixteen out of 46 economic activity sectors in Nigeria have GDP size in excess of N1 trillion each. There are yet-to-be tapped inherent opportunities in the sectors,” he said.

    Uddin explained that government’s apparent moves to enhance transparency and accountability in the sector will open up investment opportunities across the industry’s value chain. He disclosed that with estimated 40 million litres of daily petrol consumption and export opportunities to neighbouring countries, downstream subsector of the oil industry is the next frontier in oil and gas industry.

  • ‘MSMEs can create jobs, wealth’

    Micro, Small and Medium Enterprises (MSMEs) can propel the growth of the nation’s economy through jobs and wealth creation to alleviate  poverty, the Director-General, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Mr. Bature Umar Masari, has said.

    Bature, who was represented by Monday Ewans, stated this at the annual general meeting (AGM) of the Nigerian Association of Small and Medium Enterprises (NASME) in Lagos. He said SMEDAN policy priorities are to raise a broad-based awareness and appreciation for entrepreneurship, enable a regulatory environment that will support the sector and improve financial support for SMEs.

    The outgoing president and chairman of NASME, Alhaji Garba Ibrahim, urged incoming council executive to address the challenges facing the sector, among which is inadequate power supply.

  • Taxes, corruption major constraint to MSMEs growth – World Bank

    The World Bank Country Programme Director, Nigeria, Mr. Rachid Benmessaoud, disclosed on Tuesday that survey has ranked access to finance, power, infrastructure, taxes and corruption as major constrain to the growth of Micro Small and Medium Enterprises in Nigeria.

    Benmessaoud, who stated this during the launch of Business Innovation and Growth Big platform in partnership with Growth and Employment Project GEM, World Bank Group in Abuja, insisted that this project is aimed at stimulating job creation.

    He said, “The government of Nigeria has identified security, job creation and governance as three key priorities. For job creation, its focus is on the need to create two million new jobs each year and it aims to do this through industrialization, public works and agricultural expansion and diversifying the economy away from reliance on oil revenues.

    “GEM project is a major initiative aimed at stimulating job creation through the growth of specific high potential, non- oil sectors, ICT construction, entertainment and light manufacturing including agro processing, hospitality and tourism.

    “It will also make resources available to help address some key constraints identified by business, with a particular emphasis on MSMEs, which are widely regarded as a vital engine for growth and job creation.”

    “When focus is more on access to finance as constraint, the poor quality of business plan, financial planning and managerial capacity are often diagnosed as being significant factors behind the inability to attract or unlock finance.”

     

  • BoI disburses N700m to MSMEs

    BoI disburses N700m to MSMEs

    THE Bank of Industry (BoI) has disbursed N700 million for lending to entrepreneurs in Taraba State.

    According to the bank, the funds, which were pulled  by the state government and BoI under its matching fund scheme, following the execution of a Memorandum of Understanding (MOU) for the establishment of a N700 million Micro, Small and Medium Enterprise Development Fund, will boost economic activities and curtail unemployment.

    Speaking during the cheque presentation to beneficiaries of the scheme,   BoI’s Managing Director, Rasheed Olaoluwa, said many loan applications were deficient in either documentation or by virtue of line of businesses not covered by the Bank.

    He noted that before the advent of the matching fund scheme in the state, the bank had invested over N90.6 million in support of genuine businesses, adding that the beneficiaries include Al-Umalau Nig. Ltd, Bombillac Integrated Farms, Tsoro Women MPCS, MalKings MPCS, Wainabe MPCS, Master Bakers’ projects under the Cassava Bread Fund.

    “With the state government’s intervention, a total of 130 projects cut across all local government areas in the state was realised. Amounts were set for each beneficiary between N1.5 million and N1.7 million but not exceeding a total of N215.0million to be processed from the state government’s portion of the fund.

    “Out of this number, 75 projects doing various aspects of processing and value addition totalling about N118, 971,766.69 were approved by the bank. It is however important to point out that only 52 of the 75 beneficiaries who got approval accepted the offers.

     

    “Out of the 52 who have accepted the loan offers, 40 cooperatives have been processed for disbursement out of which 18 benefitting cooperatives that are ready for issuance today would be issued with their respective cheques for the acquisition of raw materials to enhance their productive activities. The remaining 22 cooperatives will also be receiving their cheques in a week’s time as their documentations have been fully processed,” Olaoluwa explained.

    The BoI boss added that the bank has embarked on several initiatives to make access to finance easier for small businesses.  “MSMEs are confronted with low level of financial support because their business plans and loan requests are poorly packaged and non-bankable. In order to address these challenges, BoI has appointed 200 Business Development Service Providers (BDSPs) in three categories of state, Zonal and national coverage to package loan proposals/business plans for the bank’s prospective customers as well as provide post-finance services such as mentorship, handholding, financial advice and inculcation of best practices.

    “We have adopted a cluster-based product programmes in project financing on the basis of the comparative advantages of the local government areas of the federation in terms of their natural resource endowments, as well as established state offices in some states of the Federation in order to bring the bank’s services closer to entrepreneurs in those states,”  he explained.

  • SMEDAN presents new MSMEs’ national policy

    SMEDAN presents new MSMEs’ national policy

    • Seeks stakeholders’ support

    The Small and Medium Enterprises Development Association of Nigeria (SMEDAN) is seeking the support of private sector operators on the implementation of the National Policy on Micro, Small and Medium Enterprises (MSMEs).

    Speaking at the presentation of the policy  in Kaduna, at the weekend, the Director-General/CEO, SMEDAN, Alhaji Bature Masari, said to ensure a seamless implementation of the policy, a detailed and robust framework has been developed, which enunciates the various responsibilities of relevant stakeholders on the implementation value chain.

    “With this first review of the policy, I sincerely believe that the MSMEs sub-sector in Nigeria has been given a further impetus to drive the national economy towards job creation, wealth creation and poverty alleviation. In this regard, I will request for the support and cooperation of all stakeholders towards the achievement of the MSMEs sub-sector of our dream in Nigeria through the implementation of the policy,” Masari said.

    He said the policy, which will be in place between this year and  2025 will be reviewed every four years. He sai it will facilitate and sustain a vibrant MSMEs sub-sector that will be the major driver of national economic growth and development including job creation.

    He added that this will be accomplished by accelerating the profitable expansion of existing MSMEs along the value chain, ensuring transition from micro to small enterprises, small to medium enterprises and medium to large enterprises, thereby enabling them to increase their contribution to Gross Domestic Product (GDP) and employment generation.

    Masari added that the policy outlines key objectives, strategies and programmes for driving the development of MSMEs. It also specifies several programmatic areas such as finance, institutional, legal and regulatory framework, skills development, technology, research and development, extension and support services, marketing and infrastructure and cost of doing businesses.