MSMEs to enjoy more bank financing – Minister

… Says only 0.2% have access to loans
Micro, Small and Medium Scale Enterprises (MSMEs) in Nigeria will now have seamless access to bank financing following the establishment of SME Rating Agency of Nigeria.

This was disclosed by the Minister of State, Ministry of Industry, Trade and Investments, Hajia Aisha Abubakar, during the inauguration of Small and Medium Enterprises Rating Agency of Nigeria (SMERAN) in Abuja.

The minister in her keynote address stressed that funding the MSMEs was the key to sustain growth in the economy since the nation’s exit from recession.

Hajiya Abubakar stated that access to finance has remained a major challenge to MSMEs, but disclosed that the government of President Muhammadu Buhari has taken some steps to encourage MSMEs and improve on the ease of doing business in the country.

Such incentives include, the tax relief and pioneer status granted to some companies, the laws on the use of movable assets as collateral recently signed into law as well as VAIDS.

The Minister who applauded SMEDAN for the initiative called on Duns & Broadstreet, the implementing partner to ensure that the initiative does not increase the financial burden of MSMEs.

She also expressed her wishes to bring more rating agencies on board for easy access of MSMEs while the Security and Exchange Commission (SEC) will regulate their activities.

“Government is working hard to connect MSMEs to the world for they are very vital and key driver of every economy. A properly rated MSME will no doubt do a lot to alleviate our problems” she emphasised.

The Director General of Small and Medium Enterprise Development Agency of Nigeria (SMEDAN), Dr Umar Dikko Radder in his remarks stressed the importance and power of MSMEs in an economy.

Radda said that MSME has been the bedrock of meaningful development, adding that conscious efforts must be made to strengthen it.

“Most MSMEs are moribund due to lack of funds, and requisite skills, leading banks and lending institution to avoid them and categorize them as high risk factor.

“To this end, SMEDAN and other stake holders jointly agreed to set up a rating agency in Nigeria as a panacea to boast the confidence of investors. It will rate and issue certificate of debt obligations, establish a rating benchmark and create competition for MSMEs in Nigeria.

“SMEDAN is here to boost confidence to foreign parties, provide rating, investment information and advice as need arises, to promote global competition as well created awareness” he said.

The Managing Director of Bank of Industry Mr Kayode Pitan, in his message said that there were 37million MSMEs in the country 2013 which contribute 48.9 percent GDP which is very low and received only about 0.2 percent of loan giving out by banks which explains why most of them are dead.

“Bankers have issues in funding them because they don’t have reliable financial records and no data for rating them but ‘Dun & Bradstreet’ is here to position them for better funding.

“In 2013 there were about 37 million MSMEs and have 0.2% of loan portfolio. Bank has problem in financing the sector. What we are doing today is to rate them for the good and benefit of SMEDAN and to help them to grow.” Pitan stated.