Home Business Operators want FG establish to SME bank for reduced interest rate

Operators want FG establish to SME bank for reduced interest rate


LAGOS – The Federal Government has been urged to establish an SME bank that would focus on lending at a single-digit interest rate.

Mr Johnson Rewane, Vice-President of the Association of Small and Medium Business Entrepreneurs, made the appeal in an interview with the News Agency of Nigeria (NAN) on Sunday in Lagos.

Rewane also called for disbursement of SME intervention funds through SME associations to eradicate the bottlenecks associated with acquisition of such funds.

He said that SMEs could not access various national and international intervention funds available to them due to stringent conditions.

Rewane said that there was disconnect between the intended beneficiaries of such funds and the agencies providing them.

He added that the channels of disbursing such funds were unfavourable to SMEs.

“These funds are often channelled through microfinance banks, which in turn, disburse the funds as loans with double-digit interest rates.

“The purpose of the fund is defeated because many SME operators cannot sustain their businesses with high interest rates,’’ he said.

Similarly, Mrs Doris Iyamabo, President of the Small and Medium Enterprises Women Association of Nigeria, called for a review of rigid conditions for loan acquisition in the country.

Iyamabo told NAN that inadequate funding had stifled the growth of SMEs and prevented them from contributing immensely to the nation’s economic growth.

She noted that many entrepreneurs, especially those in the SME sector, could not access bank loans because they often failed to meet banks’ high credit risk standards.

“Bank loan has gone beyond the reach of SME operators because many entrepreneurs do not have landed property or other valuables as collateral for loan acquisition.

“Initially, it was a commercial bank problem; recently, microfinance banks have started demanding unrealistic collateral to grant loans to SMEs,’’ she said.

The Central Bank of Nigeria (CBN) recently urged entrepreneurs to take advantage of the N220 billion provided for Medium, Small and Micro Enterprises (MSMEs).

The Director, Development Finance Office of the CBN, Chief Paul Elohaiwe, made the call at a sensitisation workshop for stakeholders in Awka, Anambra.

Elohaiwe said that the fund was set aside by the Federal Government to enhance agricultural productivity value chain and others in the economy. (NAN)

Previous articlePart-time legislature: Ogun lawmakers express mixed reactions
Next articleCleric, parents want FG to end ASUP strike

Leave a Reply