Through the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), the Federal Government has made a N500 million grant accessible to just six Small and Medium Enterprises (SMEs).
Many operators of small and medium-sized enterprises were not aware that a Nigerian bank had filed a N500 million loan portfolio to support small firms several months ago.
Charles Odii, Director General of SMEDAN, revealed this on Wednesday during the signing of a Memorandum of Understanding (MoU) with Sterling Bank, which aims to give N5 billion in loans with single-digit interest rates to the nation’s small enterprises.
He said : “We had a case where we have some funds in one of the banks, I am not going to mention the name of the bank. It was close to N500 million. And how many people accessed that money? Six people. N500 million and just six people were able to access that money. ”
Odii blamed poor information dissemination for the inability of most SMEs to leverage on the fund.
” Everybody I asked, small business operators, even in FCT said they did not know that the money was available, ” he said.
Speaking on the deal with Sterling Bank, the new SMEDAN boss: “The MoU is to create a loan portfolio of N5 billion at a single digit interest rate for small businesses across different sectors.
” From the loan available, we can make access to finance available to close to 10,000 businesses.”
Odii, who said the importance of access to finance by small businesses cannot be over-emphasized, posited that the agency would leave no stone unturned to ensure small businesses in the country get easy access to funding.
” What we want to do as an agency is to first of all make this access for finance easier because we understand finance is very scarce, and finance is very expensive in tjis part of the world,” he said.
On his part, the Managing Director of Sterling Bank, Mr Abubakar Suleiman, said government had before now rolled out various access to finance intervention programmes for SMEs, adding that the involvement of the bank in the new scheme would be a game changer.
He said the partnership the bank was contemplating with SMEDAN was one that will not only provide access to finance for small businesses, but ensure it serves as a springboard for massive expansion of many SMEs to bigger enterprises.
“Our job is to guide them into the journey of becoming an institution that can attract finance. So as much we are going to give low interest rate finance, the real thing is if you pass through the process successfully, you can access finance anywhere, because you will be able to meet the basic needs that are required, and they are not complicated, ” the Sterling Bank’s chief said.
Speaking further, Suleiman said details of the SMEs’ finance scheme would be made available at the SMEDAN and the bank’s websites, adding that the loan tenure would range from six months to a maximum of two years.