Yemisi Izuora
The Central Bank of Nigeria (CBN) has said that women would be largely considered in the disbursement of the N220billion
Micro Small and Medium Enterprises (MSMEs) intervention fund instituted by the bank.
The bank has therefore set aside N132 billion representing 60 per cent of the fund to support women-owned businesses.
It said the idea is to offer financial backing to women who are considered one of the most vulnerable segments of the society.
The CBN also expressed its commitment to bridge the N9.6 trillion financing gap in the SMEs sub-sector of the economy.
CBN Director of Corporate Communication, Alhaji Ibrahim Mu’azu who disclosed these at the weekend, said disbursement of significant part of the N220 billion MSMEs instituted by the regulator remained part of its commitment to providing improved financing opportunities for small businesses.
Mu’azu, who spoke at the 2015 Annual Conference organized by the Finance Correspondents Association of Nigeria (FICAN) in Lagos, said poor access to credit remains one of the biggest limitations faced by small businesses and has to be tackled collectively by stakeholders in the financial services sector.
The director said the objective was to unlock the potential of small businesses through credit support and taking such enterprises to positions where they would be able to create jobs and reduce poverty among the citizenry.
He said a huge channel has been created for the administration of the loans through private or state owned microfinance institutions, finance houses, as well as commercial banks.
State governments, he added, are allowed to access up to N2 billion each for on lending to eligible beneficiaries through participating financial institutions in their respective states.
According to him, A maximum of 10 per cent of the commercial component of the fund is being be channelled to trading and commerce to ensure that productive sectors of the economy continue to attract more financing necessary for employment creation and diversification of the country’s economic base.
“The broad objective of the N220 billion MSMEs fund is to channel low interest fund through participating institutions, like banks and microfinance banks and state governments to small businesses that need it to create jobs and empower grassroots population,” he said.
“The fund has reduced cost of borrowing and created better opportunities for beneficiaries to declare better results he claimed”.
He however explained said that prospective borrowers should get themselves acquainted with the drawn down procedures and provide the needed information that will enable their banks consider the loan requests.
However, the President, Association of Small Business Owners (ASBON) Dr. Femi Egbesola considered the draw down criteria as unrealistic and beyond the reach of small business owners.
He said that commercial banks authorized by the CBN to disburse the funds do not see SME operators as serous people that need such funds.
Egbesola urged the CBN and commercial banks to rethink their SMEs’ funding strategy because of the huge benefits increased credit access by small businesses will add to the economy.