The Central Bank of Nigeria (CBN) has emphasized the need to increase credit culture in order to record significant improvement in area of financial inclusion for Small and Medium Enterprises (SMEs).
The Senior Manager, Development Finance Department of CBN, Chinedu Zephaniah, who spoke at a workshop organised by Bankers’ Committee on funding Nigeria SMEs, said SMEs have direct impact on the growth of any economy and contribute about 48 percent to Nigeria’s Gross Domestic Product (GDP), with employment generation.
He said CBN has about N3 trillion earmarked for economic development, out of which N220 billion is targeted at SMEs.
He lamented that poor business structure and weak financial system have made it difficult for financial institutions to support SMEs.
“At the moment, we have disbursed N170 billion to support SMEs but the percentage of people that pay back their loan at appropriate time is not encouraging,” he said.
Zephaniah said when people pay back as and when due, it will avail others the opportunity to access the fund.
“We realize that women have peculiar financial exclusion circumstance in Nigeria, that is why 60 percent of the 220 billion is earmark for them and it is nine percent.”
“To access all the intervention of the CBN, all you need to do is to convince your bank that when you take N50, 000, you will pay back on agreed date”, he added.
Also speaking, the Head of Business Banking, Standard Chartered Bank, Benjamin Dike said when SMEs collect money to create wealth and refund it as and when due, the confidence of lending institutions will be high and collectively achieve tangible growth.
He tasked financial institutions to focus on creating business knowledge and managerial capacity among SMEs.
“Most businesses failed not because of lack of financing but lack of competent and managerial skill on the part of promoter.
Speaking on accessing funds to grow the SMEs, the Executive Director, Small and Medium Enterprises of Nigeria’s Bank of Industry (BOI), Dr. Waheed Olagunju said Nigeria has huge potentials that can be unlocked, adding that with simplified credit offering through the `Funding Nigeria SMEs` intervention programme, all stakeholders and large economy will tap into the huge growth benefits.
Waheed who was represented by the Regional Manager, Obaro Osah said the initiative, which is part of government`s economic diversification effort towards increasing SME’s access to intervention funds, would grow their businesses for effective contribution to the Nigerian economy.
