FG To Encourage Low-Cost Funding For SMEs – Buhari

President Muhammadu Buhari has assured the Federal Government would continue to ensure that low cost financing would be made available to the nation’s Micro, Small and Medium Scale Enterprises (MSMEs.
Buhari, who was represented by Vice President Yemi Osinbajo at the SME Financing Conference with the theme, “Bridging the Nigerian SME Funding Gap”, convened by the Nigerian-American Chamber of Commerce, Kaduna State chapter and the Economic Affairs Section of the United States Embassy, however, assured that working through cooperatives and trade organizations, credit can reach the larger number of those in MSME sector. He further assured of government’s resolve to engage more with Small and Medium Scale Entrepreneurs in Nigeria towards ensuring sustainable economic development and wealth creation in the country was made clear.
He said, “SMEs are grossly under-served in terms of low cost financing. There are several reasons this may be so, including how to deal with the sheer scale of numbers of SMEs that need to access concessionary funds in order to make an appreciable impact.”
The President said the importance of financing SMEs has never been lost on the governments, but for lack of access to affordable loans, adding that several deliberate and sustained financial initiatives have been put in place by the Central Bank of Nigeria (CBN), yet SMEs still remain grossly under-served.
He listed cooperatives, market women and trade groups, artisans and start-up companies as veritable partners who are being engaged towards the creation of wealth with overall goal of boosting job creation and ultimately, economic growth and development.
“This would be the main focus of our engagement with the SME sector. We believe that working through the co-operatives, market and trade organisations, credit can reach the largest numbers,” he said.
He pointed out that the CBN had in 2003 put in place an Entrepreneurship Funding initiative where banks set aside 10 per cent of their annual profit before tax for equity investment schemes in SMEs. Buhari added that in 2010, CBN approved N500 billion debentures stocks issued by the Bank of Industry (BoI) out of which N200 billion was set aside for re-financing and re-structuring of banks’ existing portfolios to Nigerian SME manufacturing sector, offered at a seven per cent interest rate, all in a bid to ensure that funding challenges militating against their growth and development are frontally addressed.
“In 2013, CBN again launched MSME Development Funds with the objective of channeling low interest funds to MSME sub-sector by providing facilities to eligible participating financial institutions for lending to SME,” he said.

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