N220bn MSMED fund: Ambode urges CBN to cut interest rate, boost finance

In order to change lack of access to credit by Nigeria’s small business owners, Governor of Lagos state, Akinwunmi Ambode, has called on the Central Bank of Nigeria (CBN) to release N220 billion Micro, Small and Medium Enterprises Development (MSMED) fund to states at five per cent, saying, government policies are stifling growth of the Nigeria’s economy.

The Lagos state governor charged policy makers in the country to focus on amending directives that stifle economic growth and commerce, querying the reason for the provision of letters from the Debt Managemnt Office, and approvals from the Federal Ministry of Finance and the CBN to be able to obtain commercial loans from the banks.

Speaking at the opening session of the 2017 Annual Bankers Committee Retreat in Lagos on Saturday, Ambode, who noted that all the projects being done by the state is directed towards economic growth said, “I as a state government want to take a commercial loan from the bank, they tell me to go and get a letter from the DMO, I should go and get approval for FMF, I should go to CBN, who does that?

“When we take the extra money outside the IGR, we are actually trying to help the economy to retrace itself, and that is why you are able to excite yourself with the growth that you have seen in the third quarter when we saw 1.4 per cent, but that is not the number that we want. Government seems to shoot itself in the leg. Why should Lagos state go and be meeting DMO that I want to take a commercial loan when 80 per cent of my IGR can pay the loan itself back.

“There is some sense of homogeneity in the policies that we make, but sometimes they are not really flexible; and you end up, we come back and say we want to create jobs, but the things that create jobs are the things that we are actually working against; and you create unnecessary competition in the system.”

Ambode, who stressed the need to abandon a profit-making goal in achieving the ambition of growing the economy ,said the state has so far given out N10 billion through its employment trust fund at five per cent.

“if you want to activate a particular sector of which the majority of Nigerians are in, you have to shut your eye to profit making”, he said.

He charged banks and the CBN that in ensuring funding for critical sectors targeted at creating jobs, lifting citizens out of poverty and growing the economy, profit must not be the goal adding that “if you want to touch them (small businesses), there has to be something different about the loan.

Don’t forget also it is not a commercial loan, it is money from the CBN to the banks who are just intermediaries to give it to the poor people. So, if you give me, I will give them at five percent” even as he queried that is it every time that the banks must make profit?”

Earlier in his opening remarks, the CBN governor, Godwin Emefiele, while noting that less than half of the N220 billion MSMEDF had been drawn, challenged banks to take up the task of mending the disconnect between SMEs and access to the fund.

He charged the bankers at the retreat to come up with ways though which they will play greater role in increasing access to finance in the country as a way of addressing unemployment and poverty noting that the country needs to record at least three to four percent growth to match the rising population growth of about three per cent.

Motolani Oseni