The Nation Newspaper

Tag: SMEs’

  • BOI asks SMEs to present viable proposals

    BOI asks SMEs to present viable proposals

    The Bank of Industry (BOI) has enjoined operators of Small and Medium Enterprises (SMEs) in Nigeria to have well- packaged bankable proposals before seeking funding support from development finance institutions. This is in addition to equipping themselves with enough information about any funding agency they intend to approach for support so that they are fully armed and abreast with questions that may follow suit.

    Ms. Evelyn Oputu, Managing Director of the bank, gave the advice during a programme organised by Enterprise Development Centre (EDC) of the Pan Atlantic University (Lagos Business School) for business executives, entrepreneurs and start-ups.

    She observed that the inability of most SMEs to secure funding for their businesses lies in their inability to present proposals that are rich and convincing enough for banks to fund.

    Oputu said entrepreneurs are not adequately equipped with the necessary information needed to secure loans, saying some who have approached the bank in the past are not even aware of the mandate and objectives of the bank. She assured that the bank will continue to support the SMEs sector, which she described as the engine room of growth of any economy because of the potentials of the real sector to generate massive employment.

    In his presentation, General Manager, BOI, Mr. Mohammed Abdul-Ganiyu, informed the gathering of entrepreneurs that the bank which has managed series of intervention funds aimed at repositioning the industrial sector, has so far saved about 8,070 jobs in the textile sector.

    According to him, this has led to the turnaround of 38 textile firms from imminent collapse.

    He advised that entrepreneurs who are into similar line of production could form themselves into a kind of cooperative group to access funding from the bank, saying it is easier for them to have cheap access to infrastructure through the industrial cluster initiative.

    Abdul-Ganiyu said as a way of increasing funding to the SME sector, the bank in 2006 through its paradigm shift initiative, dedicated 85 percent of its resources to the funding of the BOI tasks SMEs on bankable proposals.

  • World Bank agency pledges support for SMEs’ lending

    World Bank agency pledges support for SMEs’ lending

    The International Finance Corporation (IFC), an agency of the World Bank, is assisting local banks to boost lending to Small and Medium Scale Enterprise (SMEs) in the country.

    Speaking at the SME Toolkit Global Partner conference in Lagos, IFC, Nigeria Country Manager, Solomon Quaynor, said the corporation found that banks do not want the high risk transactions associated with lending to SMEs.

    Quaynor said the SME Toolkit would enable the entrepreneurs to manage their businesses.

    IFC, he said, stepped in to de-risk such loans by providing financial infrastructure and developing collateral registry that will assist banks in lending to the subsector.

    ”We are working on getting the SMEs to use toolkit, so that banks can be more comfortable lending to the subsector. Our focus is not about giving money to the banks to lend to SMEs. It is about building their confidence in the SMEs so that the subsector can easily obtain loans from lenders,” he said.

    He said the corporation spends a lot of time training the banks to understand SMEs by designing products for the subsector among other things. It is not about the money we are providing for banks, but that we are getting them to be more careful in lending to SMEs.

    He said the corporation is investing in broadband services to ensure that the right communication platform needed to reach more entrepreneurs across the country is made available.

    General Manager, IBM Africa, Taiwo Otiti, said the SMEs tools help entrepreneurs manage their businesses properly, and in the process, making it attractive for banks to grant them loans.

    “The SMEs Toolkit will help entrepreneurs input their financials, making it easier for banks to understand and take lending decisions on their account positions,” he said.

    He said SMEs remain engine of growth for the economy, adding that they are the largest employer of labour within the economy. He said when the SMEs businesses are run well, they will have the capacity to employ more people.

    “Part of the SMEs teaching is how to package their businesses to attract banks’ lending. Also note that there are several types of banking in the country,” he said.

     

  • ‘SMEs need credit insurance’

    Nigeria needs a flexible credit insurance regime to boost its small and medium scale enterprises (SMEs), the Executive Secretary, Nigerian Association of Small and Medium Enterprises (NASME), Mr Eke Ubiji, has said.

    He said the scheme would assist the growth of trade, assure businesses of financial security and give confidence to banks as they would be more comfortable in funding companies, which have their receivables covered by credit insurance against payment defaults.

    He emphasised that the SMEs would need“strong insurance schemes”from their home base as businesses expand.

    Also, Chuke Nwude of Department of Banking and Finance, Faculty of Business Administration, University of Nigeria, Enugu, said the government should execute pragmatic programmes, including an insolvency component which have firms.

    He urged the government to pursue a reform agenda geared towards productivity gains with the ultimate goal of fostering growth.

    The Director-General,Kaduna Business School, Dr Dahiru Sani, said SMEs play a vital role in the economy, adding that they experience constraints when accessing formal sector finance.

    He said this is because of the high risk perception of small firms and inadequate collateral.

    This, he noted, justifies a compelling need for a flexible credit guarantee scheme.

    He said SMEs face constraints when accessing formal sector credit and this prevents them from achieving their full potential.

    Sani called for a review of the financial system, including corporate governance and local capital markets.

    The system, he explained, should help struggling companies.

     

     

     

  • 28,000 acquire skills in Kwara

    28,000 acquire skills in Kwara

    About 28,000 youths have graduated from an entrepreneurship scheme set up by Kwara State.

    The Abdulfatah Ahmed administration introduced the scheme aiming to reduce the alarming rate of unemployment particularly among the youth in the state.

    The state government has also voted N100m for small- and medium-scale enterprises (SMEs), the state Commissioner for Commerce and Cooperative, Alhaji Raji Mohammed has said.

    Mohammed spoke in Ilorin, the state capital, at the presentation of entrepreneurship certificates to no fewer than 150 fresh graduates of the jobs scheme.

    The commissioner said the youths were trained in financial management, opportunity identification and customer relations under the entrepreneurship programme of the state University, (KWASU) Malete for four weeks.

    He said the state had also released a sum of N45 million soft loans to the beneficiaries for them to be self-employed.

    He said the youth empowerment scheme was part of a strategy designed to reduce poverty and create wealth among people in the state.

    He added that the 150 youths were later clustered into three registered cooperative societies to give them access to bank loans.

    Alhaji Raji, who said that government cannot absorb all its graduate youths into the civil service, added that the entrepreneurial training has equipped the trainees to become job creators rather than job seekers.

    Also speaking, Director, Entrepreneurship Centre, KWASU, Dr. Muritala Awodun, said the Centre would monitor the youth for 12 months in their various ventures in order to see to their growth and development.

    Dr. Awodun said the five-semester entrepreneurial training was collapsed into four weeks for the beneficiaries.

    “As a result of the training, the youths have been able to identify what business venture they want to pursue. They can also be able to stand on their own and nurture their businesses to maturity together with likely challenges they may face,” he said.

    He, therefore, advised the beneficiaries to make judicious use of the training and financial empowerment package and not to see it as a share of national cake but as set-up capital.

    Said he: “I urge the beneficiaries to utilise the opportunity by improving on the empowerment. The 150 youths have been given the appropriate tutorship to stand on their own. We re-orientated them towards believing in job creation. We changed their mindsets from looking for somebody to employ them. The KWASU centre had decided to nurture them for the next 12 months.”

  • Chamber decries banks’ reluctance to grant smes loans

    Chamber decries banks’ reluctance to grant smes loans

    The Port Harcourt Chambers of Commerce, Industries, Mines and Agriculture (PHCCIMA) has blamed the dwindling fortunes of the Small and Medium Scale Enterprises (SMEs) on banks’ reluctance to grant loans.

    President of the chambers, Emeka Unachukwu, said the challenge is the major problem facing the Organised Private Sector (OPS).

    He spoke at the inaugural quarterly business roundtable by the OPS and the Rivers State Government in Port Harcourt.

    It had as its theme: Charting a new pathway: Strengthening partnerships between public-private sector.

    He lamented that despite the impressive performances of banks, they demonstrate insignificant consideration for lending to the SMEs, adding that they deserve greater attention as the nucleus of a developing economy.

    He charged the government to desist from entrusting banks with the mandate of implementing government’s policies on SMEs. He prescribed greater involvement of the OPS to ensure that loans are granted to the stakeholders as a step towards speedy development of the country and its economy.

  • Etisalat, EDC empower SMEs

    As part of its commitment to continually empower Small and Medium Enterprises (SMEs) and guide them to maximise their potentials for growth, , Etisalat Nigeria, recently hosted SMEs at the 2013 SME Toolkit Nigeria Conference in partnership with the Enterprise Development Centre (EDC), of the Pan African University.

    The conference, which took place at the Lagos Business School (LBS), according to a statement, was held on Wednesday, April 10.

    The SME Toolkit is an international online platform of the International Finance Corporation (IFC), a member of the World Bank, available in over 35 countries in the world, which offers free business management information and training for SMEs.

    Speaking at the conference, Head, High Value Events and Sponsorship, Etisalat Nigeria, Ebi Atawodi, said that partnering with the EDC in promoting the growth of Small and Medium Scale Enterprises through the SME Toolkit conference was one of the core platforms the company has chosen to drive the development of businesses in Nigeria.

    Speaking in the same vein, Director, Enterprise Development Centre (EDC), Peter Bamkole, thanked Etisalat for partnering with the EDC to drive the growth of SMEs.

    The SME toolkit global partner conference brings together about 300 trainers, users, experts, content and service providers to discuss how to effectively deploy the e-learning methods through the onilne platform. The conference was held in Nigeria for the first time which also coincided with the 10th ananiversary of the SME toolkit globally.

  • SMEs can now list on Nigerian Stock Exchange

    SMALL businesses now have every course to smile with the approval by the Nigerian Stock Exchange (NSE) to trade on the floor of the Exchange.

    With the inauguration of the Alternative Securities Market (ASEM) a trading platform for small businesses, promoters of SMEs can now trade their equities on the floor of the stock exchange.

    To stakeholders, this is definitely a game changer, as the Small Businesses and Mid-Cap’s will be listed on the trading board of the NSE will give them an opportunity to access the capital market for equity funding.

    An upbeat Mr. Oscar Onyema, Chief Executive, NSE, while justifying the innovative SMEs window, stressed that: “Unlike equities on the main board of the NSE, companies who intend to list on the ASEM will not need the kind of stringent requirements that is fulfilled by the former. The NSE has in the past had the Second Tier Securities Exchange Market which has largely failed to attract investor money.”

    The companies currently listed on the ASEM include Adswitch plc, Afrik Pharmaceuticals plc, Anino International plc, Capital Oil plc, Juli plc, McNichols Consolidated plc, Rak Unity Petroleum plc, Rokana Industries plc, Smart Products Nigeria plc, Union Venture & Petroleum plc, and West Africa Aluminum Products plc.

  • Kebbi to assist SMEs get loans

    The Kebbi State Government said it would support members of the state chapter of National Association of Small Scale Industries (NASSI) to obtain loans from the national body.

    The Permanent Secretary in the Ministry of Commerce and Industries, Alhaji Abdullahi Gebe, said this was part of government’s efforts to improve industrial development in the state.

    Gebe, who addressed officials of the association in Birnin Kebbi, advised them to register their proposals for the NASSI’s loans.

    NASSI Secretary in the state, Alhaji Sama’ila Sulaiman, said the state chapter would form a committee that would work with the government to obtain the loans.

    He said: “The association will ensure that members benefit from the Bank of Industry’s loans given the facts the funds have been set aside as loans to small scale industrialists with 4.5 per cent interest rate.”

    He said the association would embark on a tour in the state to ensure members registered and benefitted from the loans.

    “It is lamentable that small scale industrialists have remained dormant in spite of the opportunities that abound and we will ensure that the trend is reversed,” he added.

     

  • ‘12% interest rate will kill SMEs’

    THE pegging of Monetary Policy Rate (MPR) at 12 per cent by the Central Bank of Nigeria (CBN) would hamper the growth of the  Small and Medium Enterprises (SMEs) and eventually kill them if care is not taken, the Executive Secretary, The Nigerian Association of  Small and Medium Enterprises (NASME), Mr Eke Ubiji, has warned.

    He said: “This is because banks will not like to give out the funds to borrowers at the same rate they procure it from the CBN.

    “It, therefore, means that any SME operator who wants to borrow money from the bank must be ready to pay a higher rate than the 12 per cent, in addition to other charges that the banks normally impose on loans,” he said.

    According to him, instead of the monetary authorities using only high interest rate to check inflation for the eighth consecutive time, it would have been better to use other monetary policy instruments. He said reducing interest would encourage business owners to have access to funds, or set up new ones, to create job opportunities, to employ people, and reduce unemployment in the country.

    “There are various methods the government can use to check inflation. One of such, depending on the risk profile on the borrower, is the issuance of treasury bills to mop up excess liquidity in the system. With the rate, no serious entrepreneur can dare to take loan to venture into production in an environment, where one has to provide one’s own electricity, water, security; and at times, construct roads to enable  vehicles to access the business premises to evacuate goods that have been produced to the market place,” he said.

    Recently, the Monetary Policy Committee retained the benchmark lending rate at 12 per cent for the eighth time in a row.

  • AfDB blames National Assembly for non-release of $700m SMEs loans

    The African Development Bank (AfDB) has explained the rationale for delay in the release of the $700 million (N108 billion) loans for small and medium scale enterprises (SMEs). It blamed the delay on what it called technical hitches and the National Assembly.

    In 2011, AfDB approved $700 million for the development of SMEs in Nigeria. It also provided loans to the Bank of Industry (BoI) and NEXIM Bank two weeks ago following the signing of an agreement. The loans were given in two tranches of $500 million to BoI and $200 million to NEXIM for distribution to the qualified SMEs.

    AfDB’s representative in Nigeria Dr Ousmane Dore told The Nation that the loans arrived late because the National Assembly did not approve it in time.

    He said: “This is a sovereign-guaranteed (Federal Government-backed) credit lines. In this case, the credits must be approved by the parliament. So, it was one of the loans that had to wait for the approval of the National Assembly before it can be released.

    “We are trying to work out some conditions guiding the release of the loans.These are technical issues relating to the capacity of the beneficiaries to pay back the loans. Some negotiations need to be done to ascertain whether the banks have the capacity to undertake the risks of collecting the loans. This is important to ensure that confidence between the AfDB and Nigeria is intact.”

    Dore said the board of the AfDB has since approved the loans, adding that the technical issues must be sorted out before the cash is released to the would-be-beneficiaries.

    According to him, the bank is lifting its operational goals to employment generation to foster the growth of the continent. This, he said, is evident by the decision of the bank to approve and release the $700 million loans promised the operators of small and medium scale enterprises in the country.

    He said AfDB has set up loans for capacity building in some countries, including Nigeria, adding that the loans are sovereign guaranteed.

    The AfDB, he said, looks at the conditions attached to sovereign- guaranteed loans, before it releases the loans to the beneficiaries. He added that the loans are given to people at a considerable terms to ensure flexible mode of payments.

    He berated banks for not providing enough funding for the agricultural sector, adding that the sector plays a critical role in the economy. The agricultural sector, he said, is poorly funded, and as such cannot deliver expected results.

    “If you look at the overall credit in the economy, only two per cent goes to a sector like agriculture identified as one of the strongest contributors to the Gross Domestic Product(GDP). The Federal Government can work towards improving the scheme. I think the government has some schemes on that,” he added.

    He said the AfDB has dedicated loans for the growth of the power sector, stressing that infrastructural development is of major priority to the institution.

    The bank has medium-term projects in Nigeria, with a gestation period of four years.The projects spanning road construction, transportation, water, irrigation, among others, aimed at meeting the nation’s infrastructural challenges.