SMEDAN to establish Rating Agency for MSMEs

The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has concluded plans to establish SME Rating Agency of Nigeria (SMERA) which will be responsible for assessing the performance of Medium and Small Enterprises in the country for more empowerment, product standardiation and international exposure.

This was disclosed by SMEDAN’s Director General, Dr. Umar Dikko Radda, during an exclusive chat with Daily Times.

The Director General stressed that SMERA will closely monitor the activities of MSMEs and calibrate their performamce so that they can be positioned for further assistance from funding agencies, capacity training on business skills and book keeping.

He said that the move will stir positive competition among MSMEs in the country and ultimately increase the contributions of MSMEs to the GDP and to export.

He equally said that the agency is also at the fore front of articulating a legislation on the use of movable assets to acquire loans so that MSMEs can have seamless access to capital.

He said, “Two initiatives are on ground at the moment. There is a collateral registry being championed by the CBN to be able to use movable assets to obtain loans from banks.

“As at today, SMEDAN in collaboration with Bank of Industry and NEXIM bank, we have gone to India and Dubai to study the rating agencies of those countries. We have solicited for the support of Dawn and Broad Street to help us developed SME Rating Agency of Nigeria (SMERA). Efforts have gone far and I believe that we shall fix a date in September to sign the MoU between SMEDAN, Bank of Industry and NEXIM bank together with Dawn and Broad Street so that we can begin the process of setting up this SMERAN.

“The essence of the rating Agency is to rate our SMEs. Once they rate our SMEs, with that rating, they can easily go to any financial institution and get loans easily and simply,” Radda stated.

The DG added that while MSMEs in other countries drive the economy, those of Nigeria contribute mere 7 percent to the economy because they are not formalized, assessed and rated.

“MSMEs in Nigeria contribute about 48.47 percent to nominal GDP; it contributes 7.2 percent to export. But when you compare that to other countries, they contribute about 30-60 percent to export while in Nigeria it contributes only 7.2 percent because they are mostly informal.”

“For countries that has proper statistics like in the United States, I think about 65 percent of the economy is run by the MSMEs. In Canada, it is about 70 percent, in all other countries; about 50 – 80 percent of the economy is run by the MSMEs.

“If you see the performance of MSMEs in other countries, it is really amazing. Even in Nigeria, it is the MSMEs that move this economy,” he stressed.

Radda hoped that MSMEs in Nigeria will in the nearest future be compare with any other MSME that can find anywhere in the world.