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Tag: SME

  • ‘Funding SMEs lead to economic growth’

    ‘Funding SMEs lead to economic growth’

    Small and Medium scale Enterprises (SMEs) have been tipped as key to Nigeria’s growth and transformation project. However, positioning them for the role requires banks to give the subsector the needed support through funding and skills development. FirstBank of Nigeria Limited has taken some steps, including an alliance with CNN’s African Start-Up show, to help SMEs achieve their growth potential, writes COLLINS NWEZE.

    Small and Medium Enterprises (SMEs) remains a key driver of the economy. The challenge, however, is that not too many banks are willing to lend to the subsector.

    Over the years, when the loans come, they are priced higher than what obtains when lending to multinationals or other operators in the real sector of the economy in most cases. Determined to reverse the fortunes of the subsector, FirstBank of Nigeria Limited has reiterated its commitment to providing cheap and long-term funding for SMEs in the country.

    Gbenga Shobo, Executive Director (Retail Banking South), who gave this indication during the maiden edition of the bank’s SME conference, titled: “SMEConnect”, reiterated the need to create successful SMEs that would help the economy achieve its full potentials.

    “Definitely there is a lot of large buzzword right now, as a lot of banks are saying they want to do SMEs finance. But we have been relatively successful in financing SMEs. A recent survey shows that the efforts of FirstBank in this regard more than double those of any other bank in the last three years,” he said.

    He said at present about 50 per cent of the funds of the lender come from retail banking.

    “Those funds are from our SMEs, our affluent and our mass market. Retail banking is split into those segments. The Cash Reserve Ratio (CRR) itself doesn’t affect retail banking directly because it was meant for public sector funds. But it shows how more important to the banks the funds from retail banking would be because no CRR affects it. So, obviously, there is more focus on retail banking funds. So that is why we are doing more to get more SMEs,” he said.

     

    African Start-Up project

    As part of its strategic focus to grow and sustain the development of SME’s in Nigeria and Africa at large, the bank, through its SME support programme, SMEConnect, which is sponsored CNN’s African Start-Up show, is exploring how ideas are generated, formulation of business plans, and access to capital and product development amongst other things.

    African Start-Up is a 30-minute programme, which follows entrepreneurs across African countries to see how they are working to make their dreams become reality. It offers viewers the opportunities to see entrepreneurship in a broader perspective, with each show dedicated to an entrepreneur taking viewers through daily challenges.

    The programme tries to highlight the fact that the rules of entrepreneurship are not defined, its setbacks are frustrating and that the opportunities are for those with vision and creativity. Each segment is aimed to inspire the viewers as they witness one determined individual after another defying the odds. The programme, which hit the airwaves last November has featured entrepreneurs such as Fomba Trawally, a Liberian businessman who started his career as a street vendor and just recently opened Liberia’s first paper and toiletry product manufacturing company; Isaac Oboh, who started Media 256, a film and production company in Kampala, Uganda; as well as Tola Ogunsola, Damola Taiwo and Dolapo Taiwo, who pioneered the establishment of a new digital store where Nigerians can access local music.

    According to Celine DeCarlo, Account Director at CNN International. “We’re delighted that FirstBank has chosen to connect with CNN’s global audience of key business decision-makers and opinion leaders around the world via ‘African Start-Up’. This is the first time CNN has created dedicated programming looking at African SMEs. FirstBank’s exclusive sponsorship provides a unique opportunity to support a series that will shed light on efforts of successful entrepreneurs contributing to the growth and development of Africa’s economy.

    According to FirstBank’s spokesperson and head, Marketing and Corporate Communications, Folake Ani-Mumuney, the bank’s sponsorship of CNN’s “African Start-Up” is a firm commitment of our drive to sustain the development of SME’s in Nigeria and Africa as a whole. “We are proud to sponsor ‘African Start-Up’ on CNN International. SMEs play a critical role as the engine of growth in the economy, providing employment to thousands of people and contributing significantly to GDP. This segment is a critical platform for repositioning the national economy for sustained growth, and one which aligns with FirstBank’s position as the number one SME bank in Nigeria.

    “FirstBank is pleased that CNN has created this dedicated programme, which in itself is a first that takes a critical look at the lives of these entrepreneurs and the ways they have contributed to their societies in their countries. Having supported SME’s in Nigeria for over a century with first class products and services, CNN’s African Start-Up aligns with our commitment to drive and sustain the growth of SME’s in Nigeria,” she said.

    The “SMEConnect” is one of FirstBank’s SME’s value propositions designed to empower small and medium enterprises in the country. The programme is geared towards building SMEs capacities to deliver and contribute significantly to national development. FirstBank’s value proposition goes beyond an SME product or suite of products to a robust engagement programme designed in every way to help SMEs succeed.

     

    Relationship management

    As part of the engagement programme, SMEs are given access to dedicated Relationship Managers (RMs) with deep industry knowledge of the customer’s business and challenges. They can offer basic advisory services to the customer.

    The subsector are also provided with opportunities for capacity-building and business networking through National Conferences, Open Seminars, Industry-specific Forums as well as Town Hall Meetings. SMEs are also offered a free payments-and-collections platform to drive the payment and receipt aspects of their businesses and deepen their transaction capabilities and speed, with a free web presence on a social cum business online portal to enable them trade as well as network.

    Start Up Africa follows several entrepreneurs in various African countries to see how they’re working to make their dreams become reality. It explores how they generate their ideas, formulate their business plans, raise capital and distribute their products. The entrepreneurs take viewers through their daily challenges. The series’ online component encourages user participation, and serves as a forum for ideas.

     

    Branch expansion

    Shobo said the bank’s branch network has increased tremendously in the last two years. “This is just to make sure that we bank the mass population more comfortable, without queues and things like that. Why do we have queues? It’s because we have more customers than the number of branches that can handle them. We have expanded the number of branches; our ATM network is by far the most in the whole industry. Of course, if you treat your customers better, the more funds they give you. So we are really concentrating on servicing our customers in all segments much better,” he said.

    He also said that the bank found out that it needed to have different ways of approaching different segments within the youths. “What we are also doing on the youth side is that we realised that times are changing. The way the youths see things is different from the way older people see things. The youths do not prefer going to the branches, they like online banking. You find out that a lot of the hits on the website are from the youths,” he said.

     

    SMEs in Nigeria

    Shobo said SMEs in Nigeria have to grow; because that is the only way the economy. “So it must grow and that is why we are doing the national conference and after that, we are going to have regional conferences. After that, we are going to have industry specific conferences to make sure that we take the SMEs to another level,” he said.

    The bank’s experience in SMEs financing, he added, is what separates it from other lenders. “We have the most SMEs; we have had them for a long time, we understand their needs better than anybody else and clearly that informed the way we approach them. Most other banks don’t even focus on SMEs. We have relationship managers focused on them. We have products that support SME operators that do not have collateral, which a lot of other banks don’t have. I think what we haven’t done well in the past is the capacity building and that is where we want to focus on now. Like I said earlier, we like double the other banks in terms of support to SMEs,” he said.

    He said the bank listens to SMEs to know their problems and address them. “We are the number one SMEs’ bank in Nigeria, but we do not want to stop there. We want to be able to create value for our SMEs. In listening to them, survey and focus discussions and all that, we found out that capacity is a big problem. When I say capacity, I mean being able to develop proposals which banks can finance or indeed which anybody can put money to finance for them. A lot of people have dreams on what they like to do, but how do I actualise those dreams? You find out that a lot of SMEs cannot do that successfully. That is one,” he said.

    Shobo said several SMEs go into businesses and they run into trouble because they just can’t do the business properly. It is capacity that is still the problem because if you had capacity and you understand them, you wouldn’t do a business that will fail.

     

  • Why SMEs are not doing well, by Vodacom

    LACK of investment in technology and appropriate application to solve problems is one of the reasons small and medium enterprises (SMEs) are not doing well in the country, Managing Director, Vodacom Business Nigeria, Guy Clarke, has said.

    Clarke, who spoke at a roundtable on its new business product, software as services (SaaS), in Lagos over the weekend, said the firm had invested in providing infrastructure by substantially funding an undersea cable, adding that with the absence of legacy infrastructure, it could be challenging for business to grow.

    He said the firm has also invested in data centre in line with the trends in the industry, adding that the place of data and cloud can no longer be wished away as they are the two dominant forces shaping the global information technology (IT) industry.

    “The ability to analyse data and make it relevant to your need is changing. Cloud computing is another game changer. But in most emerging markets where there is no legacy infrastructure,” he said, adding the opportunity opened to businesses to leapfrog is to tap into the infrastructure provided by the firm in the country.

    Speaking on SaaS, the Product Manager, Abu Ettu, said collaboration and communication are key to business success, adding that with the appropriate solution, SMEs and other businesses could greatly optimise productivity.

    He said: “Gone are the days of buying, maintaining, upgrading and securing your software requirements inhouse. Simply choose the software your business needs and we will do the rest. Hosting SaaS from Vodacom will increase productivity by having direct communication link with employees wherever they are; banishes worries about losing data as data is securely stored at Vodacom’s data centre; increase productivity by judiciously while there will be support from Vodacom managers. There will also be access to the Vodacom Business Self Service Portal.”

    He identified speed of change, increasing complexity, new technology and targeting today’s users as the major challenges besetting businesses as offices move away from the traditional physical structure to virtual in the era of agnostic devices.

    Ettu said business agility, adaptability, continuous collaboration, speed are business drivers. Others are innovation, future-proof IT, ubiquitous computing adding that cloud has become the king of all.

  • IFC to boost financial service to underserved SMEs

    IFC to boost financial service to underserved SMEs

    International Finance Corporation (IFC), the private-sector lending arm of the World Bank, has expressed willingness to capitalise Nigerian banks to mobilise microfinance banks (MFB) and boost financial service to underserved SMEs in the country.

    Non-performing loans and high interest loans provided by Nigerian financial institutions have created credit scarcity in the economy which is strongly impeding the growth of small businesses, the largest employer of labour in oil-rich country.

    The development unit is “going to finance market leaders and those who can set the right standard and have other microfinance institutions understand what it means to operate well,” IFC Nigeria Africa department Country Manager, Solomon Adegbie-Quaynor said.

    The IFC hopes through its plan to lead an exemplary credit system with innovative products and catalyse SME lending.

    According to report, the IFC, focused on MFB innovations, issued a naira bond February last year to raise funds locally and to lend to clients, and has invested up to $25 million up five microfinance institutions.”

    IFC also has interests in 26 MFBs in 12 countries across sub-Saharan Africa, reaching over 3 million micro-enterprises and low-income households

     

  • CBN Gov laments non-accessability of N220b intervention fund for SMEs in Edo

    CBN Gov laments non-accessability of N220b intervention fund for SMEs in Edo

    The Governor of Central Bank, Sanusi Lamido Sanusi, has lamented the failure of the Small and Medium Enterprises (SMEs) in Edo to access the N220 billion intervention fund floated by government.

    Sanusi expressed his concern at the Government House in Benin at the weekend when he paid a condolence visit on Edo Government on the death of wife of Oba of Benin, Esther Erediauwa.

    He said that the high interest rate on the loan prevented enterprises from accessing the loans, noting that high interest loan was not a way of alleviating poverty.

    He said that there were 30 microfinance banks across the country mandated to grant the loans to the SMEs at low interest rates.

    The CBN governor said that the fund was targeted at the most excluded segment of the society, adding that 60 per cent of it was dedicated to women.

    Sanusi, who also condoled with Gov. Adam Oshiomhole on the death of his wife, said that he had a close relationship with the palace and treasured the memories of the queen mother.

    Responding, Oshiomhole thanked the CBN governor for the visit, adding that the death of the queen mother was painful.

    The governor described the late queen as a mother who showed interest in the development of the state.

    He also commended the CBN boss for repositioning banks in the country in the interest of the masses.

    Oshiomhole said that poverty in the country was as a result of wrong policies, adding that there was the need for deliberate laws to address the menace.

  • How SMEs fared in 2013

    How SMEs fared in 2013

    2013 was a beehive of activities for the small and medium scale enterprises, reports Bukola Afolabi

    Not a dull moment. This is apposite to describe the outgoing year in the small and medium scale enterprises (SMEs) sector.

    According to analysts, many activities point to the fact that the SME sector was being targeted for improved performance in the past year.

    The launching of the National MSME policy, the first of its kind in the sector, the development of National Enterprise Development Programme (NEDEP), an initiative spearheaded by the Federal Ministry of Trade and Investment and its three parastatals – the Bank of Industry (BoI), the Small and Medium Enterprises Development Agency (SMEDAN) and the Industrial Training Fund (ITF), to mention just a few, are some of the prominent initiatives perfected in the SMEs in the preceding year.

    Specifically, the BoI increased its focus on MSMEs to 85 per cent of its commitments in total. According to BoI, in the last year, there has been a 30 per cent increase in the number of cumulative loans approved, 67 per cent increase in cumulative value of loans and 161 per cent increase in jobs created.

    By far the most ambitious of the ministry’s pet project in the preceding year was NEDEP. The initiative was the brainchild of the Minister of Trade and Investment, Dr. Olusegun Aganga.

    According to the minister, the scheme is expected to be driven by a Small and Medium Scale Enterprises Council, comprising the federal, state and local governments “to streamline and harmonise all SME development activities across the country.”

    It will be spearheaded by the ministry, the Bank of Industry (BoI), the Small and Medium Enterprises Development Agency (SMEDAN) and the Industrial Training Fund (ITF). The minister believes that NEDEP will enable it to stimulate 3.5 million jobs “within the next two years,” citing the success of similar enterprise development models in unnamed Asian and African countries.

    Besides, he said the ministry was partnering 17 state governments to provide specialised training and access to low-interest funds to SMEs, while a monitoring unit would verify data relating to the number of jobs created through NEDEP.

    The 2012 Enterprises Baseline Survey produced in collaboration with SMEDAN showed that there are 17 million SMEs in the country employing about 45 per cent of workers and contributing almost half of the country’s Gross Domestic Product.

    SMEDAN estimates that the Nigerian economy cannot grow, maximise export potential or industrialise until 80 per cent of the labour force are engaged in SMEs. Like the Youth Enterprise With Innovation in Nigeria (YOUWIN) that President Goodluck Jonathan launched with fanfare last year, unless the stock of national infrastructure is increased, job creation will remain marginal.

    Laudable as these achievements seem, to some analysts, it is too little, too late.

    While commenting on NEDEEP, a public commentator said, it is unsurprising that the programme, like other ill-fated ones before it, is fatally flawed.

    “The problems of the Nigerian economy are structural and unless some fundamental distortions are simultaneously addressed, schemes like NEDEP can only create additional bureaucracies, consume scarce resources, and achieve little. First, the government misses the point by seeking to “create jobs.” It is now a settled economic fact that without corresponding infrastructure and social services, especially a sound education policy, it is almost meaningless for the government to be throwing money around in the name of job creation.”

    The International Labour Organisation says no decent work strategy can be successful without encouraging entrepreneurship, innovation and productivity. Organised private sector (OPS) and international development partners have also persistently said that government should take a back seat and restrict itself to policy, allowing private capital a free rein to take charge of business, including the commanding heights of the economy. Its priority should be getting the power sector privatisation right by ensuring that only reputable international firms have majority stake in the state’s power generating and distribution units. SMEs cannot thrive without reliable and affordable power.

    The Economist magazine of London estimates that 18,000 jobs will be created by $1billion of new investment in the United States. Up to 10 times more can be created in Nigeria with the same amount with new investment in mining, according to the OPS.

    The government, analysts argue, should urgently license global firms to exploit solid minerals, transparently privatise the remaining steel plants, power plants, refineries and other downstream oil and gas assets.

    The National Assembly, the analysts further stressed, should repeal the Railway Act of 1955 to open the floodgates to foreign direct investment in that sector. “Truly, liberalising the downstream petroleum sector and selling off the four moribund state-owned petroleum refineries to reputable operators will enable us to maximise the production of hydrocarbon derivatives for export and to boost local industrial activities.”

    Tokenist measures like NEDEP, YouWin and the National Directorate of Employment, these dyed in the wool critics noted, only create new cost centres without mopping up the 42 per cent of our youths that are, according to the Labour Ministry, unemployed. The Central Bank of Nigeria data that showed unemployment rising from 4.3 per cent in 1970 to 6.4 per cent in 1980 and averaging 14.6 per cent in 2006 to 2011, should be reversed. But it cannot be by the 110,000 jobs in three years targeted by YouWin, while the 28.14 million unemployed youths cannot be accommodated by the bogus target of NEDEP.

    As it gives way to the private sector in the critical economic sectors, the federal and state governments should invest massively in highways, rural infrastructure, health, water supply, environment, education and women empowerment.

    Aganga, analysts insist, will do better to initiate policies to streamline investment, business transactions and exports. These will create more jobs than the palliatives he so enthusiastically promotes.

  • Bakers endorse Honeywell Flour’s SME initiative

    Bakers endorse Honeywell Flour’s SME initiative

    Bakers, under the aegis of the Association of Master Bakers and Caterers of Nigeria (AMBCN), Lagos State chapter, have commended the Management of Honeywell Flour Mills Plc for sustaining the quality of its flour production, noting that the product has contributed to the profitability of its users, especially small businesses.

    According to the bakers, the flour, which is used mainly in the production of bread and other flour-based confectionery, have met with their expectations, especially through increased production with positive multiplier effects on the profit margin.

    In a statement, the bakers, while at the certificate award ceremony of the regular course 23 of the Honeywell Flour Mills baking school, lauded the company for instituting a programme that seeks to transform bakers’ businesses.

    Chairman, Association of Master Bakers and Caterers of Nigeria (AMBCN), Lagos State chapter, Jacob Adejorin, lauded Honeywell for instituting such a programme, saying his members have benefited immensely as they have utilised knowledge acquired to transform their respective businesses.

    Describing Honeywell’s gesture as wonderful, he urged other corporate organisations to emulate the company’s corporate social responsibility initiative.

    Speaking for Alumni of the school, John Johnson who graduated from Regular Course 22 urged the graduands, to put knowledge acquired into practice, saying every detail in production counts.

    Executive Vice Chairman, Honeywell Flour Mills Plc, Babatunde Odunayo noted that the school, which has trained and graduated over 300 Master Bakers from different parts of the country in 22 Regular Courses and 1 Executive Course, is a highly subsidised programme aimed at empowering bakers with modern baking skills and flour handling procedures that they can use to maximise yield from flour and run their bakery operations more professionally and profitably.

    Odunayo, represented by Production Director, Dr. Nino Ozara said the school remains the best any flourmill in the country has given to bakers since it touches not only their financial needs, but intellectual and social needs.

    He assured that the company would continue to serve them with increased quantities of superior quality products with the recent addition of two new mills, which are state-of-the-art facilities and which has brought production capacity to 2,610 metric tonnes from 1,610 metric tonnes, a 62 per cent increase.

    The flour milling business in Nigeria has evolved over the last two decades. In the past, Nigeria was largely dependent on flour imported from overseas to meet growing demand for flour derivatives such as bread, cakes, burgers etc. Nigeria’s dependence on imported flour came at a huge cost to the country as capital flight was the order of the day. This sad situation meant that jobs were not created for Nigerians as the flour-producing companies were located abroad, the quality of imported flour could not be guaranteed due depreciation in transit over time.

    The emergence of Gateway Honeywell Flour Mills Limited in 1985 set the tone for transformation of the industry. In June 1995, a change in the ownership structure of the company led to a change of the name from Gateway Honeywell Flour Mills Limited to Honeywell Flour Mills Limited (HFML). After its initial public offer (IPO) and listing on the Nigerian Stock Exchange in 2008, Honeywell Flour Mills Limited became a public liability company. Trading as a publicly quoted company on NSE in 2009 also necessitated a slight adjustment in the company’s name to Honeywell Flour Mills Plc.

    The entry of Honeywell Flour Mills Plc into the flour milling industry in Nigeria was a game-changer as it redefined industry standards. HFMP’s top quality flour products compelled an improvement in the quality of flour products by other players. Over the years, HFMP has positioned itself through product quality, deployment of world class facilities and manpower, as a market leader in milling, processing & packaging of flour and other wheat based products.

    Since inception, Honeywell Flour Mills Plc has remained one of the most profitable companies in Nigeria. Listing on the Nigerian Stock Exchange is proof of the high level of confidence in the company’s profitability. To further demonstrate the profitability of Honeywell Flour Mills Plc, the company recently held its 4th Annual General Meeting (AGM) on September 24th, 2013 during which it declared profit after tax of N2.84bn.

  • Sanusi on why SMEs can’t access fund

    Sanusi on why SMEs can’t access fund

    •Blames infrastructural limitations, others

    A number of factors from the complex to the superficial may be responsible for the inability of small and scale entrepreneurs to access funding for their businesses, the CBN Governor, Sanusi Lamido Sanusi has said.

    He spoke recently when members of the World Economic Forum (WEF), visited the CBN Headquarters in Abuja, as part of the build up to the hosting of the forum on Africa in Nigeria next year.

    According to the CBN boss, the question of access to credit is a big problem for small and medium scale enterprises (SMEs) and for micro enterprises.

    “Some people think it is the high rate of interest, of course, it is debatable. I think high rates of interest are a problem, but I think it is far more fundamental and goes to the point I am making which is that when you deal with credit in particular, it has got to sit within a broader ecosystem.”

    Expatiating, he said: “We cannot continue blaming the banks for not lending to SMEs. We have got to say, how much is the government spending on SMEs, how much investment is actually being done to create viable SMEs? They do not have electricity, they do not have infrastructure, they do not have security, may be the tariff regime or incentive regime is not fair, it is difficult to do business under these circumstances.”

    He was, however, quick to add that: “The attitude of the Central Bank or the banks is to say we cannot lend because those things are just not there. It is to say how we can interface with government to see that those things that need to be done are done so that we can lend. We have done that in agriculture for example.

    “We cannot lend to them, but we need to see how to interface with government so that we can see how we can solve this problem. We worked with the Ministry of Agriculture and fixed value chains and have encouraged the banks to increase lending to agriculture from less than one per cent to four per cent in two, three years and we would try to do that with the SMEs.”

    While reiterating that: “At the micro level, clearly funding is a problem, we have micro finance banks but the lending rates have become so exorbitant that what is supposed to help the poor is not helping them anymore. I saw an exhibition where there was a display by a micro finance banks marketing its loans to the poor and I said what is the rate of interest and they said two per cent a month. That would be 48 per cent and that for the poor is killing.

    “What we have done is set up a micro small and medium enterprise fund and signed a memorandum of understanding (MoU) with one of the state governments as the first and the idea is to make money available to micro finance institutions at very low rate of interest so that they can lend at low interest rates.

    “We try to work with the state governments because we believe that again micro finance needs to work within a developmental framework. So if you are lending N250,000 to a very poor woman, you need to give her training on how to use it, you need to give her education on how to manage her finance, you need to ensure that would have given her the skills to know how to manage her finance and be profitable.

    “You need to protect her against cultural issues, you need to ensure that if you lend to her, her husband is not going to take the money from her and blow it away and throw her into debt.

    “This is not what the CBN or the commercial banks or micro finance banks can do; it is going to work with the local authorities. And that is why we need local political authorities to assist.

    “These are all constraints, cultural issues, attitudes towards borrowing that we have to deal with.

    Lack of infrastructure, lack of training and so on and so we are working on that.

    On the N220 billion funds, he cited the case of Kano, in which the apex bank signed an MoU together. “The state will be responsible for repaying the N2 billion and it is at 9 per cent to them and then the state subsidises. So, the ultimate borrower will get money at no more than six or four per cent per annum and this compared to 48 per cent is a lot of money and this fund is available to them for two to three years,” he stressed.

    The fund, he emphasised, “Is stable, it is low interest and tied to a developmental agenda and 60 per cent of the fund is dedicated to women. So we are yet to have a census in all the villages, six out of ten of them must be women because we think you can’t really address poverty without laying additional emphasis on women who are more poor.”

     

  • Budget 2014: SME body gets lion’s share

    Budget 2014: SME body gets lion’s share

    From all indications, 2014 looks to be a promising year for stakeholders in the small and medium scale enterprises as the sector got the largest chunk of allocation from budget allocation to the Ministry of Trade and Investment.

    The Nation can authoritatively report a review of the 2014 budget proposal for the Trade and Investment Ministry shows that the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) got the lion share in terms of capital allocation ahead of other agencies under the ministry.

    A review of the 2014 budget proposal obtained by The Nation from the Ministry of Finance showed that the agency was allocated a total proposed capital budget of N1.24billion, which is the highest to any parastatal under the ministry, but the figure was actually a drop from the N1.66billion it got in the year 2013 budget.

    Besides, there was also a sharp drop from its total recurrent expenditure from N 959.95million in the 2013 budget to N863.44 million in the current budget.

    The Nation gathered that SMEDAN got the princely sum as a result of the quest by Federal Government to reposition SMEs through the National Enterprise Development Programme (NEDEP) which according to the initiator of the programme, the Minister of Industry and Trade and Investment, Mr. Olusegun Aganga, would generate an estimated five million jobs between 2013 and 2015.

    NEDEP is being implemented under three pillars, technical/vocational skills acquisition, business development services (BDS) Entrepreneur training and access to finance and is designed to put the SMEs sector on the right footing.

    The BDS/ Entrepreneurs training components of NEDEP is anchored under the One Local Government One Product (OLOP) programme, which the government said is tailored towards revitalising the rural economy and alleviating poverty in rural areas in Nigeria and would be done through the establishment of sustainable MSMES in the 774 Local Government Areas (LGA’s) based on comparative and competitive advantages.

    Already, SMEDAN under the NEDEP/OLOP has conducted sensitisation/needs assessment programme in 22 states and is presently conducting baseline survey and value- chain analysis in six pilot states of Lagos, Bayelsa, Anambra, Kano Benue, and Bauchi.

    Also it has handed over to the Bank of Industry (BOI) about 1000 cooperative groups and their business plans for appraisal and funding.

  • Oyo govt sets up SME for 300 youths

    Oyo State Governor, Abiola Ajimobi, has disclosed that his administration has created small businesses for over 300 youths across the state.

    He disclosed this at a workshop, commencing the coordination of operators of Small and Medium Enterprises (SME) in the state to enable them access necessary assistance from the government.

    The governor also laid bare his plan for SME operators who attended the workshop in large number. It was held at the House of Chiefs, Secretariat, Ibadan, the state capital.

    According to him, his administration set up businesses for the youth who were selected from the 33 local government areas of the state after thorough trainings in vocations such as printing, barbing, hairdressing and computing. He said the programme was part of the youth empowerment project of his administration.

    The youth empowerment, he said, was undertaken by the Ministry of Youths and Sports and the state’s Agency for Youths Development.

    He recalled that unlike similar efforts where beneficiaries were just trained in a shoddy manner and given a token start-up capital that is not enough to defray the cost of shop rent alone, the government camped the beneficiaries at different locations where they were thoroughly trained in certain vocations. After the training, they were offered all necessary equipment and enough money to rent shops with signage paid for.

    The governor said his dream is to transform the economy of the state through SMEs so that more people will be empowered to create wealth.

    He told the cheering SME operators that his administration would transform the small scale industrial estate located at Iyaganku in Ibadan from next year. He added that an amount of money has been earmarked to assist operators and would-be operators that are serious about running sustainable businesses.

    Ajimobi emphasised that his administration embarked on urban renewal across the state to stimulate economic development, pointing out that investors were already coming to Oyo State based on the success of the efforts.

    He enjoined the SME operators to cooperate with the government by producing quality products and services that will keep customers coming back.

    Earlier, the Commissioner for Industry, Applied Science and Technology, Mr Adedapo Lam-Adesina, also called on the SME operators to register their businesses and liaise with relevant units of the ministry to access opportunities and assistance offered by the government. He said the current administration was determined to support the growth of SMEs because it is the life wire of any growing economy.

    Adesina also disclosed that several trainings have been lined up for operators in the state and enjoined them to avail themselves of the opportunity.

    Representatives of banks also addressed the gathering. They educated the operators on their various products through which they can access loans easily.

     

  • Corruption bane of SMEs in Nigeria, Africa

    Corruption bane of SMEs in Nigeria, Africa

    A new report by the Association of Chartered Certified Accountants (ACCA) may have corroborated experts’ view that bribery and corruption is a major contributor to the demise of 80 per cent of Small and Medium Scale Enterprises (SMEs), within the first five years of their establishment in Nigeria and sub-Saharan Africa.

    77 per cent of accountants in sub-Saharan Africa, surveyed for a global study, believe that bribery is a major concern for businesses in the SMEs sector, and 64 per cent said it had a negative impact on the business environment as a whole.

    Commenting on the report, Toyin Ademola from ACCA Nigeria, said: “While sub-Saharan Africa is a huge place, it is clear that there is a consensus among respondents that bribery and corruption damages a business’s reputation and makes it harder to attract investment.

    The big question for accountants here in Nigeria is: How do we tackle bribery and corruption? The research respondents said the most effective methods would be whistle-blowing laws and more high profile prosecutions.”

    The newly published research from ACCA further stated that more than 60 per cent of respondents did not support the idea that the law should treat bribery and corruption more leniently in the SMEs sector than in the large company or public sectors; but should be tackled across board.

    The report, “Combating Bribery in the SMEs sector” was conducted by ACCA among 1000 of its global members.

    Ademola reiterated: “This report has a clear message for accountants, SMEs and the government here in Nigeria. The full restoration of trust and confidence in the business sector can only be achieved when people believe that business is being conducted fairly and transparently.

    “By adopting a value-based approach, businesses can help themselves and, indirectly, help to achieve the wider goal of enhancing confidence in the business sector as a whole. Accountants, who have twin responsibilities to give best advice to their employers or clients and an obligation to act in the public interest, have a major part to play in this process.”

    The findings reveal a concern that many SMEs are not taking the right steps to mitigate the risks of exposure to bribery and corruption. It also suggests that many businesses have been willing to mis-state financial statements to cover up for bribery and corruption and that recourse to such practices has been exacerbated by the global financial crisis.

    Speaking with a cross-section of entrepreneurs, they shared their experiences as sole proprietors thus far.

    Mr. Sebastian Johnson, who runs Sebastian Electronics Venture, Lagos, who noted that some entrepreneurs may have been compelled to offer bribes to some unscrupulous individuals in an attempt to curry their favours, said it behooves the giver to insist on playing by the rules all the time.

    “Actually, the amount I was asked to pay before I was authorised to sell my electronic products was fair and affordable. But I know some people who have had to pay more for the same. This, I think, can have a drain on their finances if not checked in the future,” he stressed.

    Echoing similar sentiments, Uche Okoro, who runs Uche Pharmacy, Lagos, also recounts his experience. “Before I started my business”, he began, “I went to take permission from the National Agency for Food and Drugs Administration and Control and I was told to pay some amount of money, thus I might not be a victim of those that pay large amount of money before they were authorised. The amount I was asked to pay was moderate and good. But I do know that some others may have been compelled by circumstances beyond their control to part with unreceipted money in the past.”

    Speaking separately with The Nation, Sandra Emerson, also a pharmacist and Oreoluwa Bello, who runs a snack bar in Mushin axis of Lagos, observed that judging by their experience, they have not fell victim of bribery, especially from authorising agents.

    Said: Emerson: “As far as I know, I don’t think there is any form of corruption within the agency because the amount I paid before I start selling was okay. But that is not to say that people have not been coerced by some officials of some of these agencies to offer one form of gratification or the other. You cannot put it past them.”

    In her own assertion, she said: “The amount we paid here was okay, and I don’t think there is any form of corruption among the agency.”