MSME’s intervention fund: Stakeholders want EFCC’s probe of BoI

Publish names, addresses of beneficiaries – AMEN
Accuses bank of giving loans to ghost beneficiaries
No, we never connive with machine importers – BoI

The Association of Micro Entrepreneurs of Nigeria (AMEN) has urged the Economic and Financial Crimes Commission (EFCC) to beam its searchlight on the activities of the Bank of Industry (BoI).

The association said this has become compelling following concerns raised by some stakeholders and other concerned Nigerians about BoI’s activities regarding the disbursement of the fund meant for operators in the sectors.

This call is coming against the backdrop of alleged kickbacks, corruption and needless severe conditions its members encounter while trying to access the various Micro, Small and Medium Enterprises fund (a National Enterprise Development Programme initiative of the Federal Government).

This is just as stakeholders in the nation’s real sector, who spoke to our reporter recently noted the inability of many entrepreneurs to also access the N220 billion SME’s fund earmarked for them by the Central Bank of Nigeria (CBN), saying that the challenge has pushed operators in the micro, small and medium enterprises sector, lately, to appeal to the apex bank to, as a matter of urgency review the guidelines for the disbursement of the intervention funds, which is aimed at assisting the operators to shore-up their production capacity.

The fund is a government ingenuity to provide subsidised loans to SMEs at single digit (9% per annum) all inclusive interest rate. It’s also to cater for applications received from Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) under the NEDEP scheme.

The economic rationale behind its creation is to stimulate economic activities in the SME sub-sector being the major drivers of industrialisation, wealth and job creation in any country. The fund can be assessed by duly registered limited liability companies, enterprises and cooperatives in Nigeria and applications for its accessibility are received and processed at BoI state offices.

In an exclusive chat with our reporter, AMEN PresiContinued from page 1 dent, Prince Saviour Iche, alleged that officials of BoI unduly prevented SME operators from accessing the various funds made available by the Federal Government for selfish reasons, adding that it was high time the EFCC investigated the activities of the bank.

Iche, who wondered why the bank preferred to hold ‘liquid’ the fund targeted at the SME stakeholders in the country, maintained that the stringent requirements given by the BoI for accessing the fund was a subtle bid to dissuade members from applying for it in order to divert the funds for selfish reasons.

He said, “But, many of us have met those rigid conditions, yet, the bank is not willing to give the loan out to our members. There is a high-level corruption going in BoI. Therefore, we challenge the bank to publish the names, addresses of beneficiaries it claims it had given the loans to.”

But the BoI has refuted the allegations over loans disbursement and also dismissed as false, insinuations that it was deliberately frustrating genuine MSME operators from accessing the special intervention fund provided by the CBN for them.

The bank , therefore, urged the agitating stakeholders to ensure they adopt the right approach in accessing the bank’s facilities as the procedure has been simplified for intending beneficiaries.

BoI also expressed concerns that despite taking far-reaching strategies to decentralise its operations, as well as engaging in extensive enlightenment campaigns through zonal officers, a section of the MSME operators had grievances to express.

In a telephone chat with its Director, Corporate Communications, Mrs. Hadiza Olaosebikan, the bank said it officials do not connive with machine importers in the country to rip-off SME operators of their meager funds.

Also, Olaosebikan had in an SMS lately said “BoI does not grant its facilities to ghost operators as insinuated by the association. Procedures have been outlined for loan approval and disbursement,” adding that aggrieved parties should avail themselves of the channels provided to facilitate loan approval and disbursement, especially the Business Development Service Providers (BDSPs).

But the AMEN helmsman has alleged that, “investigations by our members revealed that BoI gives out these loans to ‘ghost beneficiaries’ who are cronies of officials of the bank, whom the fund was not intended for in the first place,” adding that “we challenge the BoI to publish the names and addresses of those it claimed had accessed the loans.

“If you hear people say our members are unnecessarily being hindered from accessing the fund, it is the truth. This is because the officials have come up with conditions that are unwholesomely too rigid for SME operators. This is equally because as the president of AMEN, I receive text messages daily from our members complaining of the sufferings they go through trying to access the fund. So, such strident conditions make it very cumbersome for operators to access the fund,” he stressed.

Iche, who noted that some SMEs owners under AMEN started the process of accessing the fund since 2013, however wondered why many of them who had met the conditions spelt out by the development institution had not gotten the loan.

“Some of our members have been on this journey since 2013 and met the conditions by BoI for accessing the fund, because they vowed to see the end and get the loan, which personally I could not meet at the time. But they have not been able to access the fund.

The loan has not been made available to them,” he maintained. Continuing, he said:”One of the conditions the bank gave is that an operator should open a joint account with two BoI staff as signatories and 10 per cent of the loan value paid into the account. And these two staff of the BoI have the right to withdraw the money without the consent of the SME operator (owner of the business). And the assurance is that if this 10 per cent of the loan value is paid, the loan would be released within six days; now, some of my members with a lion heart have still gone further and borrowed money from friends, banks and relatives with the intention that within six days, the loan would be released and they will be in a position to pay back the money borrowed.

But as I speak to you right now, some of them deposited this 10 per cent in the last two years now; they have not seen any loan. No loan has been released to them”.

He pointed out that the sudden subtle clause by the BoI that an SME operator must own a production machine, was a swift move to further rip-off operators illegally of their meager finances because, according to him, officials of the BoI connive with importers of these machines to inflate their prices.

“All of a sudden, they said we must buy machines. You know what they do? They connive with the sellers of these production machines which they ask our members to go and buy. Most worrisome thing is that they don’t give you the loan in bulk. They make available a tranche of the loan for a machine, a part for chemical and just a token for running capital. They will now link you up with a company they have interest in to go and buy the machine from.

“Now, a machine our members would buy for N1 million if they had the money, you would go to the company they have directed you, the sellers would inflate the price and tell you is N2 million; something you could have gotten for N1 million if you had gone there on your own.

This is because they share the additional money on the price of machines sold to our members, with the BoI officials who recommended them to us. We have even protested and drawn their attention to the fact that some of our members do local fabrication and can produce these machines far better than what they recommend that we buy and that the BoI should give us the money for us to buy from our indigenous manufacturers. But the BoI refused.

If you go to Owode, you find that most companies had folded up owing to unfavourable business conditions in the country and you will also find that our people produce and sell their machines cheaper. We implored the BoI to give us this money for us to source for the machines by ourselves.

They refused. I have said it in private discussions and am saying it to you again today and here now; the EFCC should hurry and probe BoI,” he urged. But the Chairman, Nigerian Association of Small Scale Industrialists (NASSI), Lagos Division, Mr. Segun Kuti-George, told News Agency of Nigeria (NAN) that his members had been unable to access the fund, despite deliberate efforts by his association to assist members in writing presentable proposals. He had noted with dismay that the slow disbursement of the loans had made most SME operators to lose confidence in the scheme.

He said: “Up till now, we just hear that some amount has been disbursed to some SMEs. We don’t know the people who have received the funds, because I don’t think any of our members has received any loans.” Also another SME group, Association of Small Business Owners of Nigeria (ASBON), said judging by the number of successful beneficiaries of BoI loan from its members, it’s less than 5% of the total number of applicants, adding that the foremost reason for this is the bank’s inability to truly understand the capacities and best methodology in dealing with micro and small business owners.

Commenting on the issue, Dr. Femi Egbesola, National President, ASBON, said: “ASBON like every other stakeholders is facing same and common challenge of easy accessibility of loans from BoI. While BoI may rightfully acclaim that they have been disbursing funds to SMEs, the pivotal question is: How many SMEs has really and truly accessed their funds? To illustrate, if I am a financial institution and I have 10,000 applications for loan and after scrutiny, 5,000 applicants were successful but eventually I disbursed fund to just 10 applicants; yes, I can boast that I have disbursed fund to applicants but then, what is the percentage of beneficiaries compared to successful applicants? If I disbursed to 10 persons out of 5,000, can I truly say I am doing well enough? The answer is left to your imagination.” He said to help solve this bottleneck, more development banks like BoI that particularly address the financial and business needs of SMEs should be created and added that the BoI alone does have the capacities to cope with the enormous numbers of SMEs in the country.