Business
MSME Fund: CBN Seeks Synergy With Commercial Banks
The Central Bank of Ni
geria (CBN) has sought for synergy with commercial banks on access to the Micro Small and Medium Enterprises (MSMEs) fund.
Speaking to newsmen in Lagos on Monday during a workshop organised by the International Finance Corporation (IFC), the CBN’s Assistant Director, Development Finance, Mrs Amina Umar, said since the N220bn MSME intervention fund was launched in 2014, the uptake by the Deposit Money Banks had not been encouraging.
Umar said there is need for the apex bank to have interface with the commercial banks across the country to understand the banks challenges oin the MSMEs financing and funding.
She said the CBN hopes that banks need to create necessary awareness about the fund to enable over 50 per cent Nigerians access the MSMEs fund by the end of 2015 in compliance with the target set by the Bankers’ Committee.
She said that the workshop would help increase necessary awareness about the intervention fund as well as build capacity within the sector, develop innovative MSME financing products and also take advantage of the over 17 million MSMEs within the sector.
Also speaking, the CBN’s Director, Development Finance Department Dr Mudashiru Olaitan, said the workshop was organised to cross-fertilize ideas and bridge the knowledge gap about the MSME sector by the lending institutions and correct the wrong perception of the risky nature of the sector.
Olaitan said that the rejection rate of the MSME applications by commercial banks is very high, stressing that commercial banks have a strong aversion to risk due to lack of entrepreneurial skills and poor governance structures of most MSMEs, hence the need for the workshop to enlighten the bankers and encourage them more on the need for partnership to ensure the growth of the sector.
He said the MSMEs remain the engine room for economic growth, vehicle for job creation, tools for poverty alleviation and wealth creation for the country’s economy.
Meanwhile, CBN has stated that 19 states have access the N220bn MSMEs fund.
Speaking to newsmen in Abuja on Monday CBN’s Head, Relationship Management, Mr Tobin Jonathan said a total sum of N40.3 billion have so far been disbursed from the fund through some Micro Finance Banks (M FBs) in the respective states.
Jonathan said some states took up to N1 billion and N2 billion and disbursed through state governments, commercial banks micro financial banks and other financial cooperatives.
He said only N814 million had been assessed by commercial banks which was not encouraging enough for the MSMEs across the country.
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