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SMEs urge CBN to break N220bn bailout funds into smaller units

Godwin Emefiele, CBN Governor
Godwin Emefiele, CBN Governor

Three small and medium enterprises associations have appealed to the Central Bank of Nigeria (CBN) to break the N220 billion bailout funds for the small and medium scale enterprises (SMEs) into smaller units to enable all to access it.

The associations are the Nigerian Association of Small Scale Industrialists (NASSI), Nigerian Association of Small and Medium Enterprises (NASME) Lagos chapters, and the Association of Micro Entrepreneurs of Nigeria (AMEN).

The groups, said, Monday in Lagos, that the slash in the requirement from 75 to 50 per cent for the SMEs in February was not enough, further stressing that majority of the SMEs would not access the loan because the non-moveable collateral such as Certificate of Occupancy (C of O) demanded by CBN was stringent.

Chairman of NASSI, Lagos Chapter, Mr Segun Kuti-George, said that most of the association members could not access the loans because the collateral was an uphill task.

Kuti-George said the CBN needed to reduce the requirements because most SME operators did not have what the banks were demanding for.

He said the funds were only being accessed by the bigger companies at the detriment of small and micro enterprises which would have utilised the funds better.

“It is good for the banks to ask us to produce collateral, but this is a call on the government to encourage the CBN to take more risks by further reducing the requirements. I can say that only 20 per cent of the people who actually need this fund have had access to it.

“I say that because out of the small and medium operators, how many of them have Certificates of Occupancy? The most they have is machines or other tools.

“This sector employs not less than 10 to 15 people, most of whom are low income earners, but the employment goes a long way in reducing poverty, which is good for the economy.

“The banks are afraid to take risks, and if things continue like this and SMEs are the engine of growth of any economy, then how will the economy grow?” Kuti-George said.

He, however, lauded the CBN for inviting SMEs for talks on the issue, but appealed that positive measures should be taken after the talks.

Mr Eke Ubiji, Chairman of NASME said although the CBN had earlier established collateral registries to soften the requirements, the issue of C of O and others should be reviewed.

Ubiji said very few of the association members had accessed the loan.

He urged the CBN to hasten the process of the registries, which would enable operators to present collateral like personal belongings, machines and other transferable items to access the loan.

Mr Saviour Iche, President, Association of Micro Entrepreneurs of Nigeria (AMEN), said none of the association members had accessed the fund.

Iche said that the reason was that they could not meet the requirements demanded by the banks.

He urged the government to break up the fund into smaller units to enable micro-entrepreneurs to access it.

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