ABUJA – Some stakeholders in the finance industry have commended the Federal Government for its decision to use Micro-Finance Banks (MFBs) in distributing the N220 billion Micro, Small and Medium Enterprise (MSME) development fund.
They told the News Agency of Nigeria (NAN) in Abuja that the policy demonstrated the government’s determination to improve living standards in rural communities.
According to Mr Alfred Sagai, the Director, Bokkos Micro Finance Bank Limited, the decision will ensure proper disbursement of the fund for the growth of micro and small businesses at the grassroots.
Sagai said that micro-finance banks played a vital role in providing loans to small business owners without collateral, unlike the commercial banks.
“Micro-finance banks are playing a very good role in building the economy from the grassroots.
“Just as the local governments are created to get closer to the people in political administration, the micro-finance banks are established to get closer to the grassroots in economic administration.
“We ensure that those who cannot get loans from the big banks with collaterals are able to get loans in an easy manner from us and start their small businesses.
“In my local government in Bokkos, we give loans from N10, 000 up to N250,000 to the people without collateral,” he said.
According to him, we are able to do this because we know them on one-on-one basis and the transaction is done within the shortest possible time and without rigorous procedures.
Sagai added that the initiative was a “good vision that will improve the standard of living of indigents and increase the Gross Domestic Product (GDP) of the nation.”
He advised the Central Bank of Nigeria (CBN) to strictly allocate the funds to only qualified micro-finance banks that would disburse it to deserving business owners. [eap_ad_1] He further said the MFB’s would on their part ensure that the funds are utilized for the purpose for which it is being allocated.
An economic expert, Mr Gabriel Okeh, told NAN that though routing the funds to the entrepreneurs through micro-finance banks was good, it require proper monitoring by the CBN to ensure effective implementation.
“Commercial banks do not usually do much to support industrialization; they rather go into buying and selling which is not so with the micro-finance banks,’’ he said.
He said, “it has become a Nigeria factor that such funds are collected by individuals who eventually use the money for their selfish interests rather than the purpose it is meant for.
“The strength of industrialization in many countries is based on SMEs and Nigeria should not be excluded.
“ Most of the products we consume were produced by small industries of not more than 20 staff or less, outside the country such as China and Japan.
“SME is supposed to be a base for industrialization because from small scale, they mature into bigger companies and are able to employ more people,’’ he said.
Okeh, therefore, appealed to the Federal Government to create an enabling environment for SMEs to would allow them to put the loan to good use.
Also speaking, Mrs Gladys Ezeh, Managing Director, Ichi Micro-Finance Bank, based in Anambra, said that not all the micro-finance banks would be able to access the funds due to some bottlenecks.
“I think the CBN should lessen the bottlenecks the banks pass through in attempt to access this fund, so that the Federal Government will actually achieve its aim of getting the funds to the grassroots,’’ she said.
She commended the decision of the CBN to allocate 60 per cent of the total MSME fund to women, describing it as “welcome development.”
“Everybody knows that educating a woman is educating a whole nation and empowering a woman is empowering a whole nation, so it is the right step in the right direction,’’ she said. (NAN)
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