Post by Trade facilitator on Aug 29, 2021 21:36:56 GMT 1
The National Association Of Microfinance Banks of Nigeria (NAMB) Urges The Monetary Authorities To Fund The Country’s MSMEs Better
The National Association of Microfinance Banks of Nigeria (NAMB) has urged the Nigerian monetary authorities to widen the scope of their policy actions in order to fund the Nation’s Micro, Small, and Medium Enterprises (MSMEs) better.
The call was made at their 11th Annual General Meeting (AGM) by the President of the association, Malam Yusuf Ahmed Gyallesu in Abuja, Federal Capital.
In order to increase the productive capacity of these Small Scale Enterprises, the President of the association suggested to the Central Bank of Nigeria (CBN) to create links between Deposit Money Banks (DMBs), Development Banks, and other specialized Financial Institutions in the country.
The President of the Association, Malam Gyallesu said “What the Microfinance sub-sector needs now is funding; this is to enable them increase their capacity to support MSMEs in the country.
This funding can come in the form of interventions specifically designed and targeted at the MSMEs to be routed through the Microfinance Banks (MFBs).
“Another avenue is for the CBN to foster linkages between the Deposit Money Banks (DMBs), Development Banks, and other Specialized Financial Institutions such that MFBs can source wholesale funds from them in order to widen their outreach and for on-lending to the MSMEs at relatively cheaper costs”.
Every small scale business owner in Nigeria today knows that borrowing money from the Microfinance Banks is highly expensive; the interest rate is too high. How does the economy that is supposed to be driven by small scale businesses grow? It cannot work.
There is a dire need for linkages between the Deposit Money Banks, Development Banks and other Specialized Financial Institutions to allow Microfinance Banks to have increased access to their funds.
When the MFBs source funds at cheaper rates, they will also lend to the MSMEs at cheaper rates too. But a situation where MFBs in the country are left on their own to start sourcing for expensive funds, then the cost of funds will become too high for the small scale business owner to work with.
It is almost impossible for MSMEs to source funds from conventional banks in Nigeria; but they are the only financial institutions now that can lend to businesses at reasonable cost.
Until the monetary policy operators in the country realize that without proper lending policies for the growth of small and medium scale businesses the economy will remain in limbo for as long as the situation does not change.
SMEs are the engine room of growth in any economy. The world over; every government pays great attention to the aspect that grows its economy faster. If the Federal Government of Nigeria wants the economy to grow fast, special attention must be paid to Small and Medium Scale Enterprises.
The MSMEs in Nigeria contribute about 50% of the country’s Gross Domestic Product (GDP); it also accounts for about 86.3 percent of the total jobs in the country as 2017 reports by the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria.
Nigeria is the largest economy in Africa, and currently has more than 40 million Micro, Small, and Medium Scale Enterprises. This number of MSMEs account for more than 50% of the nation’s industrial jobs. They also control 90% of the activities of the manufacturing sector in Nigeria.
The sheer volume of these enterprises should tell the country’s financial and economic managers that if they want to change the financial status of the nation they should start with the MSMEs.
Any positive adjustment in the financial fortunes of these enterprises will definitely bring positive results to the economy of the country.
From the data, it shows that MSMEs are very important to the growth of the economy of this nation, and therefore should be accorded greater attention.
Stay with us as we continue to bring to you important information that will help your small business grow faster.
The National Association of Microfinance Banks of Nigeria (NAMB) has urged the Nigerian monetary authorities to widen the scope of their policy actions in order to fund the Nation’s Micro, Small, and Medium Enterprises (MSMEs) better.
The call was made at their 11th Annual General Meeting (AGM) by the President of the association, Malam Yusuf Ahmed Gyallesu in Abuja, Federal Capital.
In order to increase the productive capacity of these Small Scale Enterprises, the President of the association suggested to the Central Bank of Nigeria (CBN) to create links between Deposit Money Banks (DMBs), Development Banks, and other specialized Financial Institutions in the country.
The President of the Association, Malam Gyallesu said “What the Microfinance sub-sector needs now is funding; this is to enable them increase their capacity to support MSMEs in the country.
This funding can come in the form of interventions specifically designed and targeted at the MSMEs to be routed through the Microfinance Banks (MFBs).
“Another avenue is for the CBN to foster linkages between the Deposit Money Banks (DMBs), Development Banks, and other Specialized Financial Institutions such that MFBs can source wholesale funds from them in order to widen their outreach and for on-lending to the MSMEs at relatively cheaper costs”.
Every small scale business owner in Nigeria today knows that borrowing money from the Microfinance Banks is highly expensive; the interest rate is too high. How does the economy that is supposed to be driven by small scale businesses grow? It cannot work.
There is a dire need for linkages between the Deposit Money Banks, Development Banks and other Specialized Financial Institutions to allow Microfinance Banks to have increased access to their funds.
When the MFBs source funds at cheaper rates, they will also lend to the MSMEs at cheaper rates too. But a situation where MFBs in the country are left on their own to start sourcing for expensive funds, then the cost of funds will become too high for the small scale business owner to work with.
It is almost impossible for MSMEs to source funds from conventional banks in Nigeria; but they are the only financial institutions now that can lend to businesses at reasonable cost.
Until the monetary policy operators in the country realize that without proper lending policies for the growth of small and medium scale businesses the economy will remain in limbo for as long as the situation does not change.
SMEs are the engine room of growth in any economy. The world over; every government pays great attention to the aspect that grows its economy faster. If the Federal Government of Nigeria wants the economy to grow fast, special attention must be paid to Small and Medium Scale Enterprises.
The MSMEs in Nigeria contribute about 50% of the country’s Gross Domestic Product (GDP); it also accounts for about 86.3 percent of the total jobs in the country as 2017 reports by the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria.
Nigeria is the largest economy in Africa, and currently has more than 40 million Micro, Small, and Medium Scale Enterprises. This number of MSMEs account for more than 50% of the nation’s industrial jobs. They also control 90% of the activities of the manufacturing sector in Nigeria.
The sheer volume of these enterprises should tell the country’s financial and economic managers that if they want to change the financial status of the nation they should start with the MSMEs.
Any positive adjustment in the financial fortunes of these enterprises will definitely bring positive results to the economy of the country.
From the data, it shows that MSMEs are very important to the growth of the economy of this nation, and therefore should be accorded greater attention.
Stay with us as we continue to bring to you important information that will help your small business grow faster.
