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SMEs And Loan Opportunities

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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

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SMEs

AfDB Earmarks $500m For Women In 2022  … Raises $5bn For  Businesses

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President of the African Development Bank (AfDB), Dr. Akinwumi Adesina, says the bank would lend $500 million to women in 2022.
This follows the bank’s Affirmative Action for Women in Africa (AFAWA), which is raising the sum of $5 billion with the support of the French President, Emmanuel Macron and G-7.
This was disclosed  in a statement Adesina posted, weekend, in which he also said the bank paid out $483 million to financial institutions to lend to women’s businesses in 2021.
Adesina, whose statement is coming as the bank commenced its Annual Meetings for 2022,  commended the Board, Management and staff  for their relentless work.
He also thanked all the bank’s 81 shareholder countries for their incredible confidence and support.
Adesina in his remark said, “Our rapid Covid-19 response facility helped towards stabilising African economies: it trained 130,000 health workers, provided social protection for about 30 million vulnerable households, and provided advisory support for 300,000 small and medium-sized businesses.
“To tackle food crisis from Russia/Ukraine crisis, our Board of Directors approved last week a $1.5 billion Africa Emergency Food Production Facility to support 20 million farmers to produce 38 million metric tonnes of food. The bank partnered globally. We delivered.
“To help Africa adapt to climate change, the bank is partnering globally. Together with Global Centre for Adaptation, with former UN Secretary-General, Ban Ki-Moon, we are mobilizing $25 billion in support of Africa.
“With the support of President Emmanuel Macron and G-7, our Affirmative Action for Women in Africa (AFAWA) is raising $5 billion for women businesses.
“In 2021, we paid out $483 million to financial institutions to lend to women businesses. We will lend $500 million for women in 2022.’’
The AfDB boss said the board had approved a crisis response facility of up to $10 billion based on rigorous risk assessments when the Covid-19 pandemic struck, adding that it launched a $3 billion Covid-19 social bond on the global capital markets, the highest ever US dollar-denominated social bond in world history.
He said, “The African Development Bank was ranked by Global Finance as the Best multilateral financial institution in the world in 2021. The African Development Fund was ranked by CGD as second best in the world, ahead of all 28 concessional financing institutions in developed countries”.

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Firms, Businesses Await CBN’s Decision On Rates

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There is apprehension in the economic circles over the direction of monetary policies as the Central Bank of Nigeria (CBN) continues to review its economic policies in order to decide on exigent monetary policies in view of global and national outlooks.
Investment bankers, financiers, investors, business owners, as well as  research and advisory experts agreed, Monday, that the decisions of the apex bank’s Monetary Policy Committee (MPC) will have a significant influence on the general economic outlook, including the flows of investments between the fixed and non-fixed security markets.
But experts differed on the possible headline decision by the apex bank. While the majority feel that the time is ripe for the CBN to abandon its long-running dove stance and hike the Monetary Policy Rate (MPR).
Many experts said the bank may opt to retain the rate, its classical policy view in the recent period. The MPR has been unchanged at 11.50 per cent since September 2020, until yesterday when it was changed to 13.5 percent.
Financial Derivatives Company (FDC), headed by Bismarck Rewane, a member of President Muhammadu Buhari’s Presidential Economic Advisory Council (PEAC), said there was “no more room for the MPC to wiggle” with the continuing high inflationary trend.
The National Bureau of Statistics (NBS) last week released its latest inflation report, showing that consumer price inflation rose for the third consecutive month to 16.82 per cent in April 2022, the highest level in eight months.
While there was almost consensus by analysts on inflation increase, the slope of the curve was steeper than expected: some 50 basis points above the average projection and 72 basis points above the International Monetary Fund’s (IMF’s) 2022 country projection of 16.1 per cent.
“The probability of monetary tightening has become infinitely more likely. If the CBN were to hike rates at its next MPC meeting, it would not be an outlier.
“This is because most apex banks in both advanced and emerging economies, including Sub-saharan Africa, have begun another cycle of aggressive tightening and increase in interest rates to dampen inflation,” FDC stated.
“In all, we think the Committee would retain the MPR at 11.5 per cent alongside other monetary policy parameters.
“However, we do not rule out the possibility of a 50 basis points hike in the MPR given the hawkish rendition among global central banks and the indirect impact of the Russia-Ukraine crisis on domestic inflationary pressures,” Cordros Capital stated.
According to the  FDC, the unrelenting rise in inflation supports the argument for a rate hike.
Former President of Chartered Institute of Stockbrokers (CIS) and Managing Director, Arthur Stevens Asset Management Limited, Mr Olatunde Amolegbe, said rate retention appeared to be unsustainable in the light of current economic realities.
He said: “The CBN has maintained the same monetary stance since 2020 but this is appearing to be unsustainable now with the increasing pressure on Naira and the tightening stance that we are seeing in the developed markets, which is likely to put further inflationary pressure on our economy.
“The recent inflation figures would have also sent warning signals to the CBN of the need to act quickly and decisively. I, therefore, think it might be time for them to lean towards a gradual tightening regime aimed at stemming naira depreciation and controlling inflation.”
The naira depreciated by 1.2 per cent to N606.00 per dollar at the parallel market at the weekend, just as Nigeria’s foreign exchange reserves (forex) fell to their lowest level in eight months to $38.84 billion. But the naira was flat at N419.03 per dollar at the official Investors and Exporters (I & E) Window.
On the domestic front, the sharp increase in headline inflation to 16.82 per cent in April 2022, the highest since August 2021 will be a cause for concern to committee members, particularly as the trend will continue in the coming months due to the pass-through impact of elevated global energy prices.

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SMEs

Cooperative Woos SMEs On Business Plans

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The President/Chief Executive Officer (CEO) of iEBS Matrixx Cooperative and Credit Society Limited, Dr Larry Goodwill Ajiola, has reiterated the need for entrepreneurs to draw business plans before raising any money for the business.
Ajiola, who made this known in a forum in Port Harcourt, said the mistake of waiting for the money before drawing business plans  leads to regrets.
He noted the danger and temptation of diverting the business funds to other pressing areas during the time of planning, stating that “drawing the business plans before the capital comes remains the best for any serious-minded Small and Medium Enterprises (SMEs) owners”.
Ajiola, who is also a UN Eminent Peace Ambassador, drew the attention of iEBS Cooperative members to businesses that would benefit members, especially those who do not have business  ideas ahead the expected grants that would soon come to the members.
“Read the following business opportunities in Nigeria and draw plans before you get either your Supreme or Theoberth grants.
“Cashew nuts exportation business, Palm Oil business, Blue  Collar business, among others”, he said, stressing that “there are profitable businesses for SMEs”.
The Ambassador, who is also an international SME business consultant stated that diverting business capitals to other things due to delay in drawing business plans accounts for many businesses that have been shut, saying that “money does not stay in people’s hands. Immediate investment has always been the best for SMEs”.
He emphasised the need for government to pay more attention to SMEs, stressing that “the economy of the nation can experience a turn around if Nigeria will invest in building healthy SMEs”.

By: Lilian Peters

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