Written by Sarah NEGEDU

Banks ask to reconsider loan conditions to SMEs

Banks and other financial institutions in the country have been asked to design programmes that will enable small businesses access funds easily, as certain conditions attached to some loans keep preventing SMEs from accessing them.

The Director General of Small and Medium Enterprises Development Agency of Nigeria, Dikko Radda, said that funding had been the major challenge for Small and Medium Enterprises in the country.

He said though government had a lot of funding programmes for SMEs, the problem had been the process of obtaining the loans.

“In an effort to help SMEs access loans, we are in the process of establishing SMEs Rating Agency of Nigeria in collaboration with the Bank of Industry (BOI), Nigeria Export and Import (NEXIM) Bank and Dun and Bradstreet Nigeria Limited.

“SMEs in the country have suffered high mortality rate largely due to inadequate finance to sustain their enterprises,” Radda said.

The SMEDAN boss also said that the rating of small and medium enterprises would enable them secure financing from banks.

Meanwhile, the Central Bank of Nigeria, CBN, has established National Collateral Registry of Nigeria to improve access to finance particularly for Micro, Small and Medium Enterprises, MSMEs.

He said the collateral registry would facilitate the use of movable or personal assets as collateral that remained in possession or control of the borrowers and thereby improved access to secured finance.

“You can use your movable assets for example generator, car and machine even gold as far as it is registered to access funds,” he said.

Radda said that the establishment of the Development Bank of Nigeria to address the major financing challenges facing MSMEs in Nigeria was a welcome development.

 

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