SMEs
SMEs And Loan Opportunities
Small and Medium Enterprises (SMEs) are critical to the development of any economy as they possess great potentials for employment generation and diversification that can solve the economic problems of the society.
However, there have been gross under performance of the SMEs sub-sector which has impacted negatively on economic growth and development. This, in addition to other factors, can be largely attributed to poor business financing.
To solve this problem, federal and state governments mapped out loans and grants to help the sector which if achieved would go a long way in boosting the economy.
The Tide went to town to examine the accessibility of these loans by the SMEs. Below are the findings.
Managing Director of Franco Bookshop, Mrs Franca Kalu, said she has heard and even filled different forms at different times without any tangible results.
She further noted that, “since the outbreak of COVID-19, the news of the mapped out loans which sounded like a relief to many of us are yet to enter our hands. I filled the different forms from different groups, thinking that I will use it to revive my business and overcome the terrible effects of the pandemic.
“Can you believe that up till now nothing has been done. We even paid some money to collect and return some of the forms. It is by the grace of God that my business is surviving”, she said.
Mrs Kalu continued that she needs the loan to grow and expand her business, saying that there is need for the loan to be given to those it is meant for, in order to achieve the purpose of the loan, which is to grow SMEs.
“I heard that some people have received the money and many others, who the loan are meant for, are yet to see it.
“The best thing for government to do is to use people’s Bank Verification Number(BVN), which contains detailed information about everyone, to push the loans into business hands to avoid diversion of this fund.
“My business needs money and I know that if I am given loan, l will do better than l am doing. It will be wrong for those in charge of the loans to do man-know-man”, she added.
On his part, the Managing Director, KAIEUN Concept, Mr. Kenneth I. Akoma, said business loans promised by Federal Government only exist in camera in this part of the country.
Akoma noted that he has applied both for federal and state government’s loans from different angles and wondered why the loans are difficult to come by here, while those in other geographical zones access the same loans with ease.
The MD said “if not for God’s grace and intervention, it would have been difficult for me to continue after the lockdown because l spent 98 per cent of my business money for feeding and payment of shop rents.
“Government knows where the SMEs are. They should send delegates to the people to sensitise them and ensure that the loans are given to the people they are meant for and not the other way round. We have waited for too long.
“Many business men and women don’t even know that such loans exist and so the need for sensitisation. Many entrepreneurs operate from hand to mouth”, he said.
He emphasized the need for the loans to be given to SMEs, saying that “business capitals are the problem of many businesses. If government show concern and wants the problem of poor SMEs financing to be solved, they will ensure that the money would not go back to the hands of politicians and others.
“There is also the need for mentorship in the sector to ensure proper management and utilisation of the loans when and if it would come”, he said
Also speaking, the Managing Partner of DANJOY Enterprises, Mrs Joy Dan Eke, said financing business, among other factors, has continued to limit the growth and expansion of SMEs in the country.
“The high cost of credit facilities in addition to high interest rates, maintenance costs and the demand for duly registered collateral obligations have played a major role in limiting the performance of SMEs.
“Inconsistency in government policies and bureaucratic bottlenecks experienced in the administration of incentives and support facilities from all levels of government are not left out.
“Also, the presence of multiple taxes through a levies and other tax expectations from the Federal, State and Local Government Areas also play a great role in slowing down the growth rate of SMEs in the country.
“Lack of or limited infrastructures like power supply, good roads, transportation system, raw materials and export constraints further fight against the success of Enterprises”, she said, stressing that Nigerian government need to sit up like other countries if they want to solve the problem of SMEs.
She noted that businesses are well financed in some parts of the country than other parts, which she said need to be corrected in the interest of economic development.
By: My Business with Lilian Peters
The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has reviewed the selection process for beneficiaries of a N5billion credit facility allotted, meant for small businesses in the country.
With the new procedure, the agency has mandated the submission of Corporate Affairs Commission (CAC) certificate and Tax Identification Number as a compulsory requirement to obtain the loan.
The Head of Corporate Affairs, Moshood Lawal, SMEDAN, made the disclosure during an interview with our correspondent recently in Abuja.
According to the report,last year SMEDAN signed an agreement with Sterling Bank to disburse loan options ranging from N250,000 to N2,500,000 at a single-digit interest rate of nine per cent, to facilitate the growth of small businesses through enhanced financial access.
The credit, with the target to assist over 10,000 Small and Medium Enterprises (SMEs), has a duration period of 12 months, to enable small businesses to leverage the facility fully.
Speaking at the signing ceremony, the SMEDAN’s DG, Charles Odii, described it as “an important milestone in our efforts to stimulate economic growth and drive prosperity by enhancing SME access to finance.
“We believe that the financial support, which comes at a very competitive rate, will help SMEs expand operations, hire additional employees, and contribute to an overall upswing in beneficial trade and economic activities”, he said.
But giving an update on the issue four months after, the spokesperson said a software application had been developed to smoothen the process and limit human interference on the credibility of the process.
He added that submission of CAC certificate and tax identification number was needed to identify fake applicants and ensure the fund is given to the right persons.
He said, “Concerning the N5bn loan for small businesses, We have developed an app and it is ready now. We are now taking submissions via the software application. Everyone is expected to download it, put in their business plan and every other detail. Then, they would be evaluated on the app.
“We had to move to an app to avoid human interference because almost everyone had a brother or a sister who tried to influence the process. So, it is better to register via the application, upload the Corporate Affairs Commission certificate, Tax Identification Number and other necessary documents.
“Once that process is fulfilled, the request will be evaluated and those qualified will get a reply immediately but if we had continued with former procedure, the process may be influenced.
“We also noticed that most applicants do not have their CAC certificate and that is a very important document to be submitted.
“Some persons have claimed not to have these certificate but we have insisted that it would be a very important criteria to receive the loan or they would be ineligible. We have promised to be transparent about this initiative and that promise will be kept”.
On the status of applicants who had registered earlier, Moshood explained that those applicants must start the process again using the newly developed app in order to be considered for disbursement.
“Everyone that initially applied for the grant would have to do it again. During the former procedure, they were not asked serious questions, they were only told to register but now we are asking specific questions on how the money will be utilised, the business turnover per month. It is via those questions we will be able to sort out real businessmen and fake ones”, he stated.
According to the report, over 200,000 small-scale businesses had earlier signified their interest to obtain the credit facility with successful applicants receiving emails from the bank.
The alarming rate of small scale business mortality in the country has been a reoccurring issue with the SMEDAN DG revealing that around three million businesses were lost due to varying factors such as insecurity, fraud, global competitiveness and lack of ease of doing business in the past few years.
Financial experts had expressed the view that with improved access to finance, more small business will become drivers of economic progress and important contributors to employment as well as economic and export growth.
As the economic condition continues to bite, a group of young entrepreneurs has extended support to some vulnerable Nigerians via a feeding scheme.
The group said in a statement that the initiative is aimed at providing nourishment to those in need, while drawing inspiration from the teachings of Jesus Christ.
A total of 820 individuals benefited from the programme, enjoying a diverse menu which included Chinese spaghetti, jollof rice, white rice, fried rice, and various soups.
The group from the Redeemed Christian Church of God Youth Church in Ikeja, Lagos, said the act reflects the commitment of the young entrepreneurs to make a positive impact on their community and address societal needs.
The initiative aligns with the Christian Social Responsibility mandate advocated by The Redeemed Christian Church of God, which emphasize the importance of demonstrating love and compassion to uplift communities and individuals.
Part of the statement reads, “The gesture is also in line with the Christian Social Responsibility mandate from The Redeemed Christian Church of God as a mission to meet societal needs through the demonstration of love that positively impacts communities and individuals to make a meaningful mark on the lives of individuals and families, spreading hope and nourishment in the community which is done at least once a month.
“This was led by the Provincial Youth Pastor of Province 1, Pastor Bisi Akande alongside Pastor Femi & Life Oyewunmi, Pastor Shola & Derayo Oladejo and Pastor Leke Adeboye & Titilope Adeboye”.
The Nigeria Customs Service (NCS) has deepened its relationship with its Benin counterpart in enhancing trade.
This follows a meeting held last Thursday between a deligation led by the Comptroller-General of Customs (CGC), Bashir Adewale Adeniyi, and his Republic of Benin counterpart at the Director-General of the Customs Administration of Benin Republic to strengthen collaboration between them.
The primary focus of the meeting, as outlined by the Customs boss, was to deliberate on strategies aimed at amplifying trade activities between the two nations and ensuring the seamless implementation of recommendations previously discussed during their rendezvous in Cotonou.
Highlighting the significance of the collaboration, the CGC said, “We are cognizant of the established framework for cooperation between our respective customs administrations.
“This framework was established at a higher level by the authorities of the heads of State, President Patrice Talon of Benin, and His Excellency President Bola Ahmed Tinubu of Nigeria, both expressing a desire to work together.
“It is upon this foundation that the Customs of both countries are united in their efforts”.
The Director-General of Benin Customs Administration, Mrs Adidjatou Hassan Zanouvi, in her remarks reiterated their steadfast commitment to executing the mutually agreed-upon measures.
Mrs Zaniuvi emphasised the importance of thorough monitoring to ensure effective implementation.
She noted that collaborative endeavours between the Nigeria Customs Service and the Benin Republic Customs Administration serve as a testament to their shared commitment to facilitating seamless trade operations and ensuring the efficient management of cross-border activities for the mutual benefit of both nations.
The CGC seized the opportunity to inspect ongoing projects within the Nigeria Customs Service, Seme Area Command.
He was accompanied by the Customs Area Controller, Seme Border, Comptroller Timi Bomodi.
By: Nkpemenyie Mcdominic, Lagos