CBN Building
Some small scale industrialists on Friday urged the Central Bank of Nigeria (CBN) to release the list of financial institutions and the class of beneficiaries for N220 billion bailout to SMEs.
They told the News Agency of Nigeria (NAN) in separate interviews in Lagos that many SMEs could not secure previous loans because some designated banks preferred given loan to established firms.
They also urged the CBN to direct development banks like Bank of Industry (BoI) and Bank of Agriculture (BoA) to simplify the requirements for granting the loan.
The Secretary, National Association of Small Scale Enterprises (NASME), Mr Eke Ubiji, who lauded the Federal Government for the gesture, asked it to closely monitor the loan disbursement.
According to him, the N220 billion lifeline to Micro, Small and Medium Enterprises Development Fund (MSMEDF) should go to the targeted audience rather than to already established firms.
“This time around, we hope that the SMEs will benefit from the development fund because in the past only big firms benefited from the N200 billion bailout to the sector.
“The effort of the Federal Government is laudable but we want the CBN to release a comprehensive guideline or list of the financial institutions that are eligible to disburse the funds,” Ubiji said.
Ubiji said that some of the association members who benefited from the earlier fund encountered herculean task in securing the loan.
He said that although some had repaid the loan, some were yet to meet their obligation due to the various challenges confronting the economy.
Mr Obafunwa Olaleke, who owns Obalok Ventures Ltd, a water packaging outfit, admitted receiving loan from BoI in 201, but did not disclosed the amount.
Olaleke said that the repayment plan was not so favourable because the interest rate was fairly high while the process of obtaining the loan was cumbersome.
He said that although he had managed to pay back the loans, the aim of the loan had been defeated by the challenges of doing business in the country.
“The Bank of Industry is good because at least they gave me the loan I used to start my water packaging business.
“The only thing is that before you get the loan, you will suffer. You have to submit all the papers and documents in this world.
“Anyway, it is better than the commercial banks that have very high interest rates. It will be better if the government monitors the disbursement of the N220 billion to the SMEs,” Olaleke said.
Mrs Gbonju Awojuyigbe, Director of Wandy Foods Ltd., a food packaging and processing firm, said that she could not access the earlier loan through the BoI.
Awojuyigbe said that she could count her colleagues who got loans from development banks because the requirements were too high and the processes tiring.
She decried the poor electricity supply in the country, adding that poor electricity supply was capable of making any loan obtained meaningless.
“We depend on generating sets to run our businesses and the cost is enormous,” she said.
Mr Lukman Alade, who runs a transport service business, said that he was granted three million naira to start his business in 2010, and he paid back 200,000 as interest.
Alade said that he was able to pay back the loan without any hitch, and he wishes to take another loan soon to expand the business.
“The Federal Government has tried well for small and upcoming businesses by putting a gesture in place.
“Although, I heard that some people find it difficult to access the loan but I got mine easily,” Alade said.
Mr Segun Kuti-George, Chairman, Nigerian Association of Small Scale Industrialists (NASSI), Lagos Chapter, said that the launching of the MSMEDF was a laudable idea.
Kuti-George alleged that most commercial, development banks and other financial institutions had paid lip service to granting loans to SMEs.
“The intervention of the Federal Government is excellent. For the first time, I see a fund being released that will be directed to the real people who need it, the micro, small and medium enterprises.
“We are so optimistic that once the disbursement starts and requirements are met by members, it will go in the right channel.
“However, we want the Federal Government to monitor the banks or whoever is responsible to avoid the mistakes of the past.
“The issue is not that the money is unavailable some banks just prefer to give loans to whoever they please.
“This is government loan and we hope it will serve the masses,” Kuti-George said, and urged that disbursing banks to trust SMEs instead of warding them off.
He, however, asked SMEs operators to imbibe the culture of proper record keeping and good corporate governance to enable them get loan.
NAN reports that the CBN officially commenced the disbursement of the 220 billion MSMEDF on Aug. 20 in Abuja.
The fund was launched in 2013. (NAN)
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