Kwara realized N1.2bn turnover on microcredit intervention scheme – Soewu
Mr. Olusegun Soewu is the technical adviser to the Executive Governor of Kwara state on Small and Medium Enterprises Development, and on Agriculture. In this interview, Soewu spoke on the successes recorded on the entrepreneurship scheme the state government introduced, and on other SMEs plans
As has always been advised by experts, states seem to be keying into the Entrepreneurship scheme as the way out of economic challenges. How is the scheme faring in Kwara?
What we have in Kwara state is called the Kwara Micro Credit Intervention Scheme under which we have four windows which include the agric window and transport windows. Under the transport window, beneficiaries can get motorcycles, taxi cabs and buses. There is also the artisan fund and fund for trade and commerce.
Over the last four years we have been able to tackle the funding challenges of micro and small businesses. O f course, at every point in life, money is not always enough in any economy.
Thankfully, we are getting encouraging responses from beneficiaries, which was why we came up with the Kwara Next entrepreneurship programme, in which the state government has invested N150 million. From this, we hope to service people with requests of up to N3m to N10m.
The money for the Kwara Next entrepreneur has been deposited into the Bank of Industry. We are only waiting to kick-start the programme.
Who are the beneficiaries of the Kwara Micro Credit Intervention Scheme?
They cut across classes, and that is why I said we have four windows. We have given to agric and we have managed the off-taker-driven agric scheme. The artisan group gets a dedication of N100m. Under the transport scheme, we have given out more than 150 taxis, 25 buses and 200 motorcycles.
How much does a beneficiary get under the scheme?
The amount is not fixed. We look at the demand of applicants and the type of business they want to invest in to determine how much to be given to them. We also look at their challenges in terms of the business they are into. The maximum amount we give is discretionary in the sense that we look at what applicants are doing, go to their places of work, assess their environment and ask questions on those areas and take it up after the assessment.
What are the terms and conditions for assessing the credit?
We charge per cent interest on whatever applicants collect per annum and we expect them to pay back the fund in one year spread across the 12 months, after which beneficiaries are allowed to reapply for another credit.
How much has the state government expended so far on the scheme?
The state government has spent N695m on the scheme and has got a turnover of N1.202bn.
So what have been the contributions of the captains of industry, if any, to the entrepreneurship programme?
We partner with them, in a way, because of their vast experience in investment and business. These people will help us talk to the applicants and give them professional advice on how much they really need for their businesses. They will advise them to either reduce or increase the amount they apply for. They also share their wealth of experience with the applicants and to also let people know that the programme is open to everybody in the state and that there will be no favouritism in giving out credit to applicants.
These captains of industry do not have any financial contribution into the programme, though. It is fully funded by the Kwara state government.
Is the state government getting support from any quarter for the programme?
For now, we are not enjoying any partnership with any private sector player, but we hope to get. We are, however, working with microfinance banks that disburse the money to our applicants. We are also open to support and partnership.
Is there room for expansion of the scheme, in terms of increasing the fund?
When we started the Kwara
5 And we make use of selected microfinance banks in the locality close to the people at the grassroots for them to assess the fund easily.
How do farmers access their own fund in the agric window? Do you buy farm tools for them or give them money to purchase what they need for farming?
They come to us as a cooperative and we give them small amounts to clear the land, after which we inspect the land to know if they have actually gotten the same measurement of land they collected money for. The whole idea of the agric window is to produce, not to waste, because whatever the farmers produce would be bought by off-takers before they harvest them. We have what is called the off-takers agric demand system in place. We have an agro mall somewhere around the Ministry of Agric; it is a virtual office where you have buyers of agric produce, banks nominated by the Kwara State government, agric input providers such as seeds, fertilizers, chemicals and all that, and extension.
For instance, if an offtaker wants a hundred tons of whatever items, the costing would be done at the agric mall, before which the volume of land for the product must have been determined. The state government through the microcredit will now pay for everything and monitor it from the clearing of the land till the harvest when the offtaker will take the product. Why we are doing this is because farmers are not able to stock for too long, so rather than stock and their produce decay later, the produce are taken immediately.
What monitoring measure did you put in place to safeguard the beneficiaries from misusing the fund?
We don’t disburse directly from our office here. We do that through the microfinance banks and there is an agreement between us that the fund must be recovered by the banks. We have done it in such way that beneficiaries access fund at banks closest to their place of business. So the monitoring is largely done by the banks.