The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) says it will begin the operations of its microfinance bank early 2023.
The Director-General of SMEDAN, Mr Olawale Fasanyadisclosed this in an interview with the News Agency of Nigeria (NAN) on Sunday in Abuja.
Fasanya said that the SMEDAN micro finance institution would contribute in addressing the challenge of access to finance, a major impediment to the growth of Micro Small and Medium Enterprises (MSMEs) in the country,
“We are in the process of launching a micro finance institution which will be lending at single digit interest rate.
“It will be private sector run but we will be on the board so that we will be able to checkmate abuses and know how it is being run,” he said.
Fasanya said that money had been set aside to get the licence for the bank and they were partnering with some business member organisations who would bring in funds to capitalise the micro finance institution.
“We believe that as time goes on, we will get donor groups and some other areas that we will be able to source funds that will not come at high cost and we will be using part of our own funds to reduce the interest.
“We have met all the Central Bank of Nigeria (CBN)’ requirements and once the licence is out, we will start almost immediately,’’ Fasanya assured.
The D-G raised concerns over the high interest rates charged by some banks from MSMEs operators.
According to him, access to fund has been a major impediment to the take off of MSME after building capacity of entrepreneurs.
“The funds are there, but access is the problem because of the rigorous requirements it takes to get funds from money deposit banks and the high interest rate.
“We may, however, not blame the micro finance institutions, because where they source their funds comes with a cost and it is that cost that they transfer to borrowers,” he said.
The D-G underscored the need for the commercial banks to grant access to funds to new MSMEs and viable start ups with single digit interest rate for the growth of the sector and the economy at large.
In the meantime, has called on Micro, Small and Medium Enterprises (MSMEs) to register on the agency’s portal.
According to him, registering with the agency will assist MSMEs with ease of doing businesses and in turn grow their businesses.
The SMEDAN boss said that besides having data to work with when the need arises, having all MSMEs on the agency’s portal would help them in planning for them.
“Once we have information to give to MSMEs operators, we can go on the portal and send short messages to all those 3.1 million that are registered.
“This is because we have their data, their phone numbers and their email addresses.
“If you are in Abuja for instance and you are producing coconut oil, we do not think you have to go to Lagos because it will add to your production cost.
“There may be some people bringing coconut to Abuja, all we need do is go to the portal, get your details and link you up.
“That will reduce your cost of going to source your coconut from Badagary when somebody is already bringing it in bulk to Abuja,” he said.
Fasanya said that the idea of registering on the SMEDAN MSMEs portal would help the agency to link up businesses.
“If you are producing fish in Abuja and you are buying your feed from Nasarawa State, we can easily link you up with somebody in Lugbe because we have your data,” he said.
He said while statistics put the number of MSMEs at 39 million, only 3. 1 million were registered on SMEDAN portal.
While describing the figure as abysmal, Fasanya said that the idea of registration became important to enable SMEDAN recognise each MSME as an entity.
“In spite of the figure gotten from the national survey, many of the MSMEs have no known addresses, so we want to move them from informal to formal businesses,’’ he said.
On features of the registration portal, Fasanya said that upon registration, a certificate and unique number would be generated.
He said the number would thereafter be listed among other registered companies or businesses on the portal.
