The Bankers’ Committee has reiterated the strategic importance of the Micro, Small and Medium Enterprise (MSMEs) to the growth of the Nigeria’s economy. This was stated at a workshop in Abuja, the capital city of Nigeria, on the N220 billion Micro, Small & Medium Enterprise Development Fund organized by the Bankers’ Committee’s sub-committee on Economic Development, Sustainability & Gender in collaboration with the CBN.
In his opening remarks, Director, Development Finance Department, CBN, Dr. Mudasiru Olaitan said, the essence of the workshop is to get the Deposit Money Banks (DMBs) to key into the strategic plan of the apex bank for the MSMEs.
In his presentation, the Assistant Director, MSME Development Fund, CBN Mr. Tobin Jonathan, said the workshop was organized to cross-fertilize ideas and bridge the knowledge gap on the MSME sector by the lending institutions and to also correct the wrong perception of the risky nature of the sector.
In his own presentation titled “Movable Collateral, Registry Reforms and MSME Financing in Nigeria”, Dr. Olasupo Musa of the Monitoring & Evaluation department, National Collateral Registry said, CBN is collaborating with International Finance Corporation (IFC) to establish a National Collateral Registry to stabilize MSME financing and also boost the confidence of Nigerian banks in playing active roles in financing the real sector in Nigeria, most especially the MSME sector.
According to him, the MSME sector is an important catalyst for economic growth and financing the sector needs serious attention. Globally, collateral for MSME is moving away from fixed assets to movable assets, hence the need to establish a collateral registry for the finance industry. We are excited to partner with IFC on this initiative”, Musa said.
Mr. Peter Bamkole, Director, Enterprise Development Centre, Pan Atlantic University, in his paper, challenged banks to embrace MSME financing through stimulation and that they must be seen as inter-mediators by creating marked access. According to him, banks should assist big businesses connect the dots with the MSMEs.
“Deposit money banks are positioned to demystify all the challenges associated with MSME financing through innovative lending that seeks to address ‘No Collateral’ and the use of business development service providers to handhold the entrepreneurs and also serve as their advisors.” he concluded.
The Bankers’ Committee is an umbrella body comprising the Central Bank of Nigeria (CBN), Deposit Money Banks (DMBs) and Discount Houses also reiterated its determination to continually redefine the practice of banking in Nigeria.
The Micro, Small and Medium Enterprises is based (i) on the investment in plant and machinery for those engaged in manufacturing or production, processing or preservation of goods and (ii) on the investment in equipment for enterprises engaged in providing or rendering of Services.
The Central Bank of Nigeria defines small and medium enterprises in Nigeria according to asset base and number of staff employed. The criteria are an asset base between N5 million and N500 million, and a staff strength between 10 and 100 employees.