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EoDB: SMEDAN rallies stakeholders to register as microfinance bank begins operations 2023

Workers at a Garment Factory in Lagos

*Olawale Fasanya, Director-General of the Small and Medium Enterprises Development Agency of Nigeria, discloses the regulatory agency is about launching a microfinance bank, which will be lending to stakeholders at a single digit interest rate

Isola Moses| ConsumerConnect

The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) says it will begin the operations of its Microfinance Bank (MFB) early 2023.

Mr. Olawale Fasanya, Director-General of SMEDAN, disclosed this in an interview with the News Agency of Nigeria, Sunday, December 18, 2022, in Abuja, FCT.

Fasanya said that the SMEDAN microfinance institution would contribute in addressing  the challenge of access to finance, a major impediment to the growth of Micro Small and Medium Enterprises (MSMEs) in the country,

Fasanya stated: “We are in the process of launching a microfinance institution which will be lending at single digit interest rate.

“It will be private sector run but we will be on the board so that we will be able to checkmate abuses and know how it is being run.”

The Director-General of SMEDAN disclosed that money had been set aside from to get the licence for the bank, and they were partnering with some business member organisations who would bring in funds to capitalise the microfinance institution.

He further stated: “We believe that as time goes on, we will get donor groups and some other areas that we will be able to source funds that will not come at high cost and we will be using part of our own funds to reduce the interest.

“We have met all the Central Bank of Nigeria (CBN)’ requirements and once the licence is out, we will start almost immediately.”

The Director-General, however, raised concerns over the high interest rates charged by some banks from MSMEs operators.

Access to fund has been a major impediment to the take off of MSME after building capacity of entrepreneurs, said he.

Fasanya said: “The funds are there, but access is the problem because of the rigorous requirements it takes to get funds from money deposit banks and the high interest rate.

“We may, however, not blame the micro finance institutions,  because where they source their funds comes with a cost and it is that cost that they transfer to borrowers.”

He as well underscored the need for the commercial banks to grant access to funds to new MSMEs and viable start ups with single digit interest rate for the growth of the sector and the economy at large, report stated.

Registration to benefit from EoDB initiative

Meanwhile, as regards the benefits of the Ease of Doing Business (EoDB), Fasanya, has urged Micro, Small and Medium Enterprises to register on the agency’s portal.

According to him, registering with the agency will assist MSMEs with EoDB, and in turn, grow their businesses.

He said having data to work with when the need arises, the need to have all MSMEs on the agency’s portal would help them in planning for them.

He noted: “Once we have information to give to MSMEs operators, we can go on the portal and send short messages to all those 3.1 million that are registered.

“This is because we have their data, their phone numbers and their email addresses.”

The Director-General stated: “If you are in Abuja, for instance, and you are producing coconut oil, we do not think you have to go to Lagos because it will add to your production cost.

“There may be some people bringing coconut to Abuja, all we need do is go to the portal, get your details and link you up.

“That will reduce your cost of going to source your coconut from Badagry when somebody is already bringing it in bulk to Abuja.”

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