By Ossom Raphael

Abuja – Mlicro, Small and Medium businesses in Nigeria will in no distant time heave a sigh of relief as the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) plans to establish a microfinance bank to support the activities of Micro, Small and Medium Enterprises (MSMEs).

This was disclosed, by the Director-General of SMEDAN, Dr Dikko Radda, during a meeting with the Commerce and Industry Correspondents Association of Nigeria (CICAN) in Abuja.

Radda, explained that multiple problems such as lack of funds and high interest rate charged by commercial and microfinance banks and their stringent conditions had necessitated the latest move by the agency to enable SMEs to have direct access to credit with easily simplified and modern ways of accessing funding.

He said that agency was discussions and consultations with the Central Bank of Nigeria (CBN) towards obtaining operating license for the bank.

He, however, explained that the proposed bank would start its operations in 2021 and would be owned by SMEDAN, but would also involve private sector operators and MSME operators that would serve as members of the board of the bank.

“We are in the process of establishing our own Microfinance Bank that will enable the Nigerian MSME to have direct access to credit with a very simplified and modern means of achieving that.

“The interest rate of the conventional banks is unbearable because it is over 20 per cent. And we are working hard to establish a Microfinance Bank,

“We working hard to ensure that we produce a micro finance bank that will assist SMEs operators.This micro-finance bank will not be solely owned by SMEDAN, but it will have some SMEs organisations as well as cooperatives to be on the board of the bank, so that together, we will run the micro–finance bank to meet the challenges of those who need the facilities.

“We are now on the stage of feasibility study and meeting the requirements spelt out by CBN to enable us to have a temporary license to operate.

“This is not new; the CBN had established their own micro finance bank called NIRSAL Micro Finance Bank” he said.

Speaking further, Radda said Micro, Small and Medium Enterprises (MSMEs) policy review is awaiting approval from the Federal Government.

He explained that the MSME policy was initially developed in 2006 in partnership with the United Nation Development Programme (UNDP) and was later reviewed in 2010 and 2015, adding that major areas of the reviewed policy include the classification of MSMEs based on turnover, as well as manpower. He noted that a major challenge facing MSME’s in Nigeria was packaging their products for export, citing the inclusion of the Export Facilitation Programme, which orientates small businesses on brand strategies, regulatory challenges, including products packaging and quality control for export.

“We are reviewing it again and have concluded everything about the policy. We have done the validation and have received input from stakeholders in the MSMEs ecosystem. It was presented to the Ministry of Industry, Trade and Investment and for the Federal Executive Council’s approval. It is still awaiting approval to bring into effect the new MSMEs policy in the country.”

“We have quality products in Nigeria but most of the problems MSMEs face are lack of proper branding and quality control of their products as well as regulatory issues. Nigerian MSMEs have regulatory issues that are challenging in terms of National Agency for Food and Drug Administration Commission (NAFDAC) registration, Standards Organization of Nigeria (SON) certification and products registration. Through the project, the MSMEs are being enhanced.”