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Tag: MSMEs

  • Secured Transactions Act will boost MSMEs, say experts

    The Secured Transactions in Movable Assets Act (STMA) of 2017 will boost the micro, small and medium scale enterprises (MSMEs), experts have said.

    Among others, the Act creates the National Collateral Registry (NCR), which facilitates the grant of soft loans with movable assets as collateral.

    NCR Assistant Registrar, Mrs Bisi Toro-Popoola, said the law has made it possible for people to get loans using moveable assets such as farm produce, wrappers, household utensils, intellectual property, motorcycle, among others, as collateral.

    A partner at Punuka Attorneys and Solicitors, Mrs Ebelechukwu Enedah, believes that effective implementation of the Act would ease access to finance by small businesses.

    They spoke in Lagos at a workshop on the role of Secured Transactions in Moveable Assets Act in financing MSME in Nigeria.

    It was organised by the Conference of Western Attorneys-General Africa Alliance Partnership (CWAG AAP) in conjunction with the NCR, which is under the Central Bank of Nigeria (CBN).

    Based in the United States, CWAG is a bipartisan group, which works to promote the rule of law and foster international cooperation in transnational criminal matters.

    It also provides and supports joint training programmes, international collaboration platforms, information exchange and knowledge sharing.

    The CWAG AAP seeks to establish and foster relationships with justice and law enforcement agencies and officials throughout Africa to support the rule of law and combat transnational criminal activity.

    Punuka Attorneys & Solicitors is the Nigeria Partner/Coordinator for CWAG AAP.

    Enedah described the STMA as a laudable step in the right direction.

    According to her, it was unfortunately that MSMEs, which represent 96 per cent of Nigerian businesses, is constantly plagued with the challenge of sourcing and raising capital.

    She attributed the challenge to lack of immovable assets which lending institutions prefer as security for loans.

    Enedah was, therefore, of the view that the STMA would help to address the challenges.

    “It is hoped that this Act will assuage the imbalance and go a long way to redress the prevailing position to a large extent, as it seeks to stimulate and assist MSMEs in securing financing by giving legal backing to the perfection and realisation of security interests in movable assets.

    “By implication, MSMEs can now secure loans with moveable assets. The Act also establishes the NCR to identify priority of competing interests in secured assets,” she said.

    The workshop, she said, was to enhance a better understanding of the Act towards its implementation and enforcement to encourage MSMEs’ growth.

    Cross River Attorney-General Joe Abang said STMA’s main objective was to enhance financial inclusion in Nigeria and stimulate responsible lending to MSMEs.

    “To stimulate the economy, the Act establishes a regime that guarantees access to credit secured by moveable properties.

    “In addition to the general objective of providing and developing a framework guaranteeing access to credit secured by moveable assets, the specific objectives of the Act include establishing a National Collateral Registry, stimulating affordable lending to MSMEs, facilitating the perfection and realisation of security interests in moveable assets and enhancing financial inclusion in Nigeria.

    “It is hoped that the passage of the Act would facilitate the achievement of the goals of the Presidential Enabling Business Environment Council (PEBEC) set up by the President to progressively make Nigeria an easier place for businesses to start and thrive,” he said.

    Toro-Popoola said the law provides that moveable assets used as collateral do no leave the owner. “The assets stay with you,” she said.

    She, however, said the NCR is faced with lack of funds to implement nationwide awareness campaign strategy.

    Besides, she said there had been low usage of NCR portal due to financial institutions’ reluctance of to appreciate the benefits of moveable asset-based lending.

    Despite the challenges, Toro-Popoola said the NCR is gradually building the confidence of banks and other financial institutions in moveable assets financing.

    According to her, over 600 financial institutions have registered and are leveraging the NCR infrastructure to advance credit to individuals and businesses.

    The NCR, she said, also held a workshop for judicial officers on their role in the Act’s enforcement and in dealing with loan repayment defaults.

    She added that the NCR enables businesses to leverage their assets to obtain credit for growth, among other benefits.

    Other facilitators included Punuka Attorneys & Solicitors Senior Partner Chief Anthony (SAN), a senior staff attorney at the Northeast New Jersey Legal Services, Inc, John Ukegbu, i-naira.com founder Hilary Nwaukor, Mr Obinna Nwankwo of CBN Principal Legal Services Department, and Mrs Toro-Popoola.

    Ukegbu gave a US perspective on secured transactions in moveable assets, Idigbe and Nwankwo gave an overview of the regulatory framework, while Nwaukor discussed the strategic importance of secondary derivative market platforms.

    CWAG Director Markus Green gave an overview of CWAG’s activities and spoke on the workshop’s essence.

    Idigbe said stakeholders, including lawyers, have a role to play in ensuring that market forces determine the grant of loans rather than the current monopolistic practice that is filled with hurdles for small businesses.

    To underscore the need for stakeholders to accept the reforms, he referred to the words of a Chinese philosopher Confucius: “Only the wisest and the stupidest of men never change.”

    Also at the event was presidential adviser/PEBEC Secretary Dr Jumoke Oduwole.

  • SMEDAN urges MSMEs to explore funding options

    The Director-General, Small and Medium Enterprises Development Agency (SMEDAN),  Dikko Radda,  has advised Micro Small and Medium Scales (MSMEs) in the country to explore alternative funding options instaed of waiting for government to fund and provision infrastructure for them.

    Represented by the Director, Policy Partnership and Coordination, Mr. Israel Ikymiour, at the YEEL Zero interest loan national launch in Abuja yesterday, Radda said providing support for MSMEs in the country is a challenge.

    Radda said  stakeholders in the MSMEs sector considered the  responsibility of government and government alone to provide fund and others thereby killing many viable and vibrant business ideas that would have created jobs, add value to goods and products.

    “MSMEs are globally recognised as engines of social economic transformation of especially developing nations. As has become well established, they present a vital platform for boosting technical, technological and entrepreneurial capacity amongst critical segments of the populace,” he said.

     

    MSMEs also offer opportunities to drive jobs and create wealth as well as income redistribution within society thereby partnering with YEEL Zero interest loan to support the small businesses by driving jobs.

    Speaking on the occasion, the Executive Director, YEEL Investment, Mr. Edewor Christopher said building a new Nigeria entails erecting the country on a solid and concrete foundation that will allow citizens to operate within the orbit of good quality of life.

    “YEEL Zero interest loan is a special intervention scheme targeted towards empowerment of small and medium scale business in Nigeria. The principal aim of the scheme is to ensure that no person with viable business idea remains idle, hopeless, poor, unemployed and financially constrained because of non-availability of capital. This is also to compliment the effort of the government,” he said.

    Edewor said all it needs is to work to any Fidelity Bank and get the YEEL Zero interest loan pin that can give you access to our loan page on their website and submit details. Loans are already being given to some people.

  • ‘MSMEs engage 64% of employees’

    The Lagos Chamber of  Commerce & Industry (LCCI) has hailed the activities of Micro Small & Medium Enterprises (MSMEs) as the engine of growth for any economy.

    LCCI president, Babatunde Paul Ruwase said the sector drives 64 per cent of employment in the country including providing everyday products and services to both large corporate and final consumers.

    He said though government has demonstrated a good level of sensitivity to the plight of this critical sector there is need to do more. He spoke on Wednesday in Lagos at the annual Seminar of the SME Group of LCCI on the theme “Positioning MSMEs for Development and Global Competitiveness”.

    He called on government to refocus attention on non-oil sector where SMEs participate more. He said: ‘’We join other stakeholders in calling on government to refocus attention on non-oil sector where the SMEs participate more. I strongly believe that SMEs is the most viable platform for realizing our made in Nigeria aspiration. This requires dedicated and sustained intervention in the sector through various reforms and policies”. Ruwase added that with the right environment and provision of needed infrastructure, Nigerian entrepreneurs will fully contribute to the growth of the economy.

    Small & Medium Enterprises Development Agency of Nigeria (SMEDAN) Director General, Mr. Dikko Radda who spoke on “The role of SMEDAN in positioning SMEs for global competitiveness”, asked for a dedicated SME Development Bank to address the peculiar needs of operators in the sector.

  • Credit bureau chief seeks more loans for consumers, MSMEs

    Banks provide less than 10 per cent loans to consumers and Micro, Small and Medium Enterprises (MSMEs) in Nigeria compared to other emerging economies, Managing Director/CEO, CRC Credit Bureau Limited, Tunde Popoola, has said.

    Speaking during an industry forum organised by the firm in Lagos, he said following the enactment of the Credit Reporting Act, 2017, and the launch of a global scoring platform, it is expected that consumer loan value would grow exponentially.

    He added that the World Bank projected that by 2020, one billion adults currently excluded from traditional financial systems will gain access to some form of banking services.

    Popoola, who spoke on the theme: Growth & innovation in retail banking: building sustainable business models, said the future of retail lending is in embracing financial technology for financial inclusion, adding that today and tomorrow belong to those who are able to play in retail banking. “The drivers of any sustainable retail lending business model include digitilisation, data-driven decisions,” he said.

    He added that credit bureaux (in emerging markets) have the capacity of expanding credit financing by $1.2 trillion, touching 613 million more people and reducing transaction cost by between 30 and 40 per cent.

    According to him, there are untapped opportunities to grow asset size and profits. He added that there is need to grow bank assets and profitability in a healthy way.

    Popoola also said CRC Credit Bureau is positioned to help banks and other institutions successfully manage their retail lending business on a scale that enables exponential financial growth. The firm also provides opportunity for industry practitioners to discuss the trend in consumer/retail lending; discuss business models that work in retail lending in an economy with data/information challenge, appreciate and discuss the role of credit bureau in retail lending and International Financial Reporting Standards (IFRS) implementation.

    He said Africa’s banking markets are among the most exciting in the world, adding: “The continent’s overall banking is the second fastest-growing and second most-profitable of any global region, and a hotbed of innovation. Africa’s banking revenue pools to grow at 8.5 per cent a year between 2017 and 2022, bringing the continent’s total banking revenues to $129 billion. Africa’s retail banking markets are ripe with potential and present huge opportunities for innovation and growth.

    “Revenue from retail banking will grow to $53 billion, representing about 41 per cent of total banking revenues of $129 billion. The expected growth in revenues will come from South Africa, Egypt, Nigeria, Morocco, Ghana and Kenya.”

    Also, Dun & Bradstreet Credit Bureaux Managing Director/CEO, Miguel Llenas, said the future of banking is technology. He said financial technology (fintech) firms also play critical roles in deepening financial inclusion and are also giving the banks a good fight for the market space. According to him, banks and fintech firm needed to partner to deepen financial inclusion by taking financial services to the grassroots

     

  • SystemSpecs: MSMEs need technology to thrive

    Micro, Small and Medium Scale Enterprises (MSMEs) need to explore opportunities in technology to grow and meet customers’ needs, Managing Director of SystemSpecs, John Obaro, has said.

    He spoke yesterday at the Vanguard Economic Forum on MSMEs, in Lagos. Represented by the firm’s Head of Strategy, Seun Adesanya, he  spoke on : The Role of Technology Adoption for Driving Growth and Innovation for MSMEs.

    According to Obaro, SystemSpecs is not a financial institution but a facilitator. “What we do through Remita is that we help you move your money from where it is to where you want it to be.”

    He said a lot of opportunities exist in the country and described how technology caould help small businesses start, grow, and succeed, using the example of Remita which has been instrumental to the success of some small businesses in the country.

    He highlighted six things needed for businesses to be successful and how technology can provide them. These include funding, innovation, infrastructure, accountability, cost optimisation and market expansion/growth.

    Obaro said innovation should be the first priority for a business owner. “Our first priority should be creation of value; innovation. What could be unique in what you are bringing to the table? Innovation does not just come by sitting down; it comes from thinking, research, gathering intelligence, analysing reports, asking questions. As an MSME, the first thing to think of is what innovation am I bringing? Technology gives you access to information; where it has been done before, where it is currently being done, what are the challenges and what can I do differently? Technology helps in finding out what exists in the market,” he said.

    He said although there is infrastructural deficit in the country, technology could provide an alternative, simplifying processes for entrepreneurs. For instance, technology has revolutionised financial transactions with digital banking. Today, people don’t even need to go to bank to do any financial transaction, with the example of Remita, which has made it possible to pay any government agency at the comfort of your room.

  • AfDB grant: SMEDAN strengthens funding, capacity for MSMEs

    The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has secured a grant from the African Development Bank (AfDB) to conduct feasibility studies on all the 23 Industrial Development Centres (IDCs) preparatory to their upgrade and conversion to Micro, Small and Medium Enterprises (MSMEs) cluster parks. The Bank of Industry (BoI) is also supporting the MSMEs under the SMEDAN coverage with funding to enable operators add benefits to the economy, writes COLLINS NWEZE.

    Capital is one of the most important factors needed to drive sustainable growth of Micro, Small and Medium Enterprises (MSMEs). That explains why Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has secured grant from the African Development Bank (AfDB) to conduct a feasibility study on all the 23 Industrial Development Centres (IDCs) preparatory to their upgrade and conversion to Micro Small and Medium Enterprises (MSMEs) cluster parks.

    The study, which is sponsored by a grant of approximately $600,000 or N183 million, secured from the middle income country technical assistance fund of AfDB, is the first to be granted to the Ministry of Industry, Trade and Investment/SMEDAN to encourage and improve sustainable entrepreneurial development specifically targeted at SMEs in the country.

    The centres were established in the 60s and 70s to provide middle level manpower in woodwork and metalwork to local industries. They were subsequently transferred to the agency for proper attention.

    The underlying objective of the project was to establish Common Infrastructure Facility Centres that would resolve some of the challenges faced by Small and Medium Enterprises (SMEs) with particular regard to accessing work space and common amenities like internet access, water, power, roads among others. The facility is projected to improve the global competiveness of SMEs, by reducing overhead costs and enjoying economies of scale as is usually the case with clusters.

    SMEDAN Director-General, Dikko Radda said the agency has considered turning the industrial Development Centres (IDCs) to industrial clusters to address work space problem for Micro, Small and Medium Enterprises (MSMEs) and promote economics of scale derivable from the agglomeration of critical mass of enterprises.

    So far, SMEDAN has secured a grant from the African Development Bank (AfDB) to conduct a feasibility study on all the 23 IDCs preparatory to their upgrade and conversion to MSMEs cluster parks.

    “Small businesses are spread all over the country and reaching out to them to provide solutions to their needs may be a daunting task to achieve. This is so obvious because services required by them are not provided by one agency. For instance, while skill acquisition is the prerogative of IITF, managerial skill is for SMEDAN whereas finance is the role of institutions like Bank of Industry,” Radda said.

    “To address the problem, a clinic was established, called the MSME clinic. In the team are all the various stakeholders, SMEDAN, Corporate Affairs Commission, Bank of Industry,  Standard Organisation of Nigeria (SON), among others. The clinic is domiciled in the office of the Vice President while SMEDAN provides the secretariat. The team tours the country under the leadership of the Vice President, Yemi Osinbajo, to meet with SMEs and discuss their problems with them. Each member of the team takes its turn to provide solution to the array of challenges confronting the business owners. Problems are diagnosed and solutions proffered,” he added.

    Continuing, he said accreditation is another important pillar in sanitising the MSME sub sector. “Business Development Service Providers (BDSPs) are many and varied in scope. Some BDSPs have national coverage, some regional and some state. One of the most important role they play is loan facilitation and other business development support services. Consequently, institutions such as SMEDAN and BOI have partnered them to provide trainings and loans to MSME. This important role underscores the need to accredit them through a recognised and acceptable institutional framework that will bring credibility to bear on their analysis and recommendations.  SMEDAN has established the accreditation framework for the BDSPs,” he said.

    A Lagos lawyer, Moses Adike,  said “ensuring that BDSPs provide standard service to MSMEs has been on the front burner for some time now”.

    SMEDAN has achieved some milestones in the establishment of the framework for accrediting the BDSPs in partnership with the Department for International Development (DFID). The project has a complementary component – The Credit Information Portal. The portal when deployed, would provide information to MSMEs towards accessing credit. MSMEs can now access reliable information for their credit needs from various financial institutions.

    Radda has recognised the need to boost SMEs operations by putting in place strong measures that confront these challenges facing the sector. From the implementation of the One Local Government, One Product (OLOP) Programme, National Enterprise Development Programme (NEDEP), establishment of the SME Rating Agency of Nigeria, credit information portal, ICT development to implementation of the nationwide MSMEs clinic to mention but a few, SMEDAN is helping the Federal Government to realise its vision of improving the economy and lives of the citizenry.

    To support the agency to carry out these reforms and innovations, Radda is seeking for amendment of the Act that established the agency. The idea is to re-position it to accomplish its mandate.

    The process, which originated as a follow up to resolutions taken at the maiden Management Retreat of the agency since coming to office some two years ago, has scaled through the first and second readings at the National Assembly. When passed into law, it would provide the right ammunition to fight the obstacles in its path to success.

    Radda said SMEDAN will continue to strive for excellence and strategic growth through forming strong partnerships with reputable public and private institutions. This is in order to build an all-inclusive and conducive business-to-business and access to market environment.

     

  • ‘Why MSMEs can’t access finance’

    A Director at Leapworld Limited, a firm helping Micro, Small and Medium Enterprises (MSMEs), to access funding and write good bankable business plans, Mrs. Funke Susan Medun, has said many small businesses can’t access funds because they do not have proper structure.

    “From the internal processes, a lot of small businesses do not have the system and structure in place to access needed finance to grow their businesses, and this is a huge barrier,” she said.

    According to Mrs Medun, financial institutions want a guarantee that MSMEs have the capacity to repay back loans, stressing that small business owners need to keep good books.

    “You can’t provide what you don’t have. MSMEs need to start keeping proper records and there is a need to also separate the expenses of the owners from the business so that the business can have a life of its own,” she said.

    Medun, who also said information is not available to a lot of MSMEs, however, hailed the Lagos State Employment Trust Fund (LSETF).

    Shhe lamented that a lot of businesses in the state do not know about LSETF. She noted that while some are aware, they do not know the criteria for accessing it; while others believe the fund was only meant for businesses whose operators are Lagos indigenes.

    Others, she revealed, believe that it is a national cake and so they do not have to meet the criteria to access the fund.

    Mrs Madun said despite the barriers, operators seek strategic information to leverage for growth.

    According to her, most start-ups fail to build capacity in the industry in which they operate, which has increased their failure rates.

    “You need the right skills to scale up your business and if it is lacking, the growth of the business would be limited. Applying the method you used for your survival stage at your growth stage will not grow the business sustainably,” she advised.

     

  • SMEDAN seeks more funding for MSMEs

    The Governing Board of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has reiterated the need for the agency to create a database for Micro Small and Medium Enterprises (MSMEs) that will enable the sector to attract more funding.

    The platform is also expected to help provide a reliable data on the formal and informal sectors.

    According to the Board, MSMEs are the drivers of socio-economic development in the country, hence the need to bring the MSMEs under the control of SMEDAN.

    SMEDAN Chairman, Femi Pedro, who spoke during the maiden meeting of the fourth Governing Board held at the SMEDAN headquarters in Abuja, said the database would give SMEDAN power and make it easier to coordinate the MSMEs in line with global best practices.

    He said the challenges facing government and SMEDAN include lack of reliable data and statistics in the formal and informal MSMEs; loss of tax revenue on formal and informal MSMEs; poor interagency information and resource collaboration- as well as poor coordination of social programmes and policies for MSMEs between agencies of government and the private sector.

    The board chair explained that the board of SMEDAN would get an Executive Order to compel Ministries, Departments and Agencies (MDAs)  partner  SMEDAN.

    “When we train MSMEs, we need to give them a unique identification number that will enable SMEDAN to track their activities and collect up-to-date information.

    ‘’According to the SMEDAN/NBS Survey, there are over 37 million MSMEs in the country and they are known to have contributed well over 59 million jobs, representing over 84 per cent of the total labor force.

    ”The sub-sector’s contribution to GDP in nominal terms is said to be 48.47 per cent, contributing 7.27 per cent to export,” Pedro said.

    He however, noted that MSMEs sector is fraught with challenges, assuring that the board would work  with the management of SMEDAN to address the identified challenges.

    SMEDAN Director-General, Dikko Umaru Radda made a presentation on the status of ongoing projects; the Central Bank of Nigeria (CBN) Agric-Business SMEs Cash Disbursement under the Agricbusiness/Small and Medium Enterprises Investment Scheme (AGSMEIS) fund.

    “While SMEDAN was deliberately established to midwife the sustainable and efficient structure, poor funding of this critical sub-sector, as an institution, is beset with several challenges which have impacted service delivery,” he said.

    The D-G stressed that repositioning the agency towards realising its objectives, required a review of its strategies, systems and processes to reveal weaknesses to be fixed.

    He said some of the major challenges facing the organisation were structure and poor funding.

    The highlight of the meeting was the establishment of four committees that would drive the re-engineering of the agency.

     

  • Osinbajo restates FG’s commitment to creation of atmosphere conducive for MSMEs

    Vice President Yemi Osinbajo on Thursday reiterated the commitment of the Federal Government to create atmosphere conducive for small businesses, market women and artisans to do businesses successfully.

    Osinbajo gave this assurance in Akure at the inauguration of National Micro, Small and Medium Enterprises (MSME) clinics, Ondo State, edition.

    He said in the last two years, the federal government had demonstrated an abiding commitment to facilitating genuine efforts by all states to attract investment, diversify economic base and create jobs and economic opportunities for the people.

    He said MSMEs were pivotal to the country’s development and restated the commitment of the federal government to give financial support to MSMEs across the country.

    “MSMEs have tended to be neglected in the country over the years as a result of the competing priorities as well as the tendency to discount their contribution to the nation’s economy.

    “As individual units small businesses may appear to be small, but together they account for as much as 50 per cent of Nigeria’s GDP and over 80 per cent of our labour force.

    “Clearly, they are an important part of the national economy and they should be treated as such, moreover, now that it has become inevitable for us to look inwards to become a country that is able to grow what we eat and produce what we consume.

    “The MSMEs were designed to bring government closer to the people by assembling in one place, all the regulatory agencies whose work affects the business experience of small and medium scale businesses,” he said.

    NAN

     

  • SMEDAN seeks more funding for MSMEs

    Supporting Micro Small and Medium Enterprises through funding and other operational tools will boost their contributions to economic development, the Director-General, Small and Medium Enterprise Development Agency of Nigeria (SMEDAN), Dikko Radda, has said.

    He spoke during the knowledge sharing session under the Enterprise Network Initiative (ENI) held in Lagos.

    Radda, who was represented by Friday Okpara of the Strategic Partnership and Liaison Department at SMEDA, said Nigeria’s MSMEs are equal to the tasks if they are motivated and incetivised. “They are also capable of generating enough foreign exchange and generate massive employment for the unemployed youths, hence poverty reduction and wealth creation,” he said.

    He said the ENI is a network of interdisciplinary knowledge network dedicated to promoting innovative thinking and global competitiveness. The network convenes the most relevant and knowledgeable though leaders from acadamia, government, business and civil society to challenge conventional thinking and develop new insights and perspectives on the key global systems, as well as the impact and governance of key emerging strategies and technologies for capacity building.

    He said the mission of the ENI is to improve the business climate and promote cross bo-rder trade and investment in its geographical region among MSMEs.

    He said the quality of Nigeria’s MSMEs products should be enhanced and the ease of doing business improved. “We should explore the huge markets with their unique products. “The standards and specifications should be enhanced and improved. Our labeling and packaging should meet international standards. The various embassies and the regulatory organisations and the Nigerian Customs should help make our products export ready,” he said.

    He said many Nigeria SMEs and small holder farmers remain inefficient and constrained in their productive capacities due to lack of skills, capacity and other restraints. Targeted trade Capacity Building assistance is essential for bridging that gap.

    The MSMEs need a better understanding of trade and investment programme opportunities, trade regulations and doing business practices, customs and market trend opportunities.

    He  said another opportunity for the export of Nigerian goods is the Ecowas market though the Ecowas Trade Libralisation Scheme (ETLS).