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