CEO Interview Small & Medium Scale Business I agree BoI needs to do more for SMEs - Rabiu, Board Chairman
If you look at the SME as a group, they contribute close to 45 per cent of our
gross domestic product (GDP) and account for at least 32 million people, as at the last count in 2010. That is definitely
not a group you can ignore
funds across to SMEs to start and run their businesses because if we ignore that sector, we will not have an inclusive and sustainable growth in the country.
If you look at the SME as a group, they contribute close to 45 per cent of our gross domestic product (GDP) and account for at least 32 million people, as at the last count in 2010. That is definitely not a group you can ignore. We must understand their issues and have a way of bridging them.
In keeping with our principles as a development bank, we are prepared to support enterprises with the potential to be profitable, competitive and sustainable and have substantial developmental impact.
BOI has been collaborating with Small and Medium Scale Development Agency (SMEDAN) and other agencies. But how does it solve the problem of access to funds under the National Enterprise Development Programme (NEADEP).
Every environment has its peculiar issues such as ours. We are doing as much as we need to do and I agree with the agitation that we need to do more. Very soon, these complaints will drastically reduce.
We, as a vital component of the NADEP arrangement, are committed to playing our role to actualize the objectives of the programme. But it is important to remind ourselves that the working modalities of NADEP are such that access to finance, which is one leg of the triangular execution strategy of the programme, can only come after skills acquisition by the Industrial Training Fund (ITF). Entrepreneurship development, which is the responsibility of SMEDAN, has been acquired by the prospective beneficiaries.
Besides the NADEP arrangement, we have gone a long way already in trying to address the issue of access to finance through what we refer to as ‘Bottom of the Pyramid (BOP)’ and the ‘ Cooperative Lending Scheme’, which de-emphasize the request for collateral and instead, advocates the use of guarantors as security.
The BOI recognizes the different capacities of MSMEs and this has informed the classification of businesses either as Limited Liability, Enterprise or Business Name, with each of these requiring different requirements to access loans.
It’s a herculean task, given our population. But we will do all it takes to achieve the desired results. That is why the Bank is considering other schemes for easy access to finance. Once research can confirm their (SMEs) viability, they would be made known to the public.
CEO Interview
How do you ensure that the credit intervention goes round the country, given the current situation where credit seems to be largely concentrated on select cities of Lagos, Abuja, Port Harcourt and Kano?
That is a genuine concern and the way we are going to address this is to look at the regional distribution of credit. When the minister was speaking he said we need to look at sectored distribution and regional distribution.
We have established regional offices in the six geo-political zones, which ensures that we are closer to the people. We will go a step further to look at how we can establish offices in some more states. We have partnerships with a number of states and we are exploring the possibility of establishing offices in those states as well.
In terms of sectoral distribution, we are looking at having sectorspecific intervention, in addition to the general SME intervention. We believe that by targeting this sub-sector, this will help the overall transformation agenda of Mr President.
Most importantly, we will ensure that these offices do not only focus on large businesses to the detriment of the micro, small and medium enterprises.
I want to assure Nigerians that our board will align itself with the shared expectations of the common national vision for which the bank was established.