Financial experts and entrepreneurs at the on-going 23rd
Nigeria Economic Summit (NES#23) have called on the Federal Government to
provide more credit facility for Medium, Small and Micro Enterprises (MSMEs) operators.
The experts spoke in Abuja at the Plenary session on `Access to
Capital’ at the summit with the theme; “Opportunities, Productivity and
Employment; Actualising the Economic Recovery and Growth Plan.’’ They also
spoke on the need for the government to deepen the capital markets in order to
ease access to long term funding for on-lending to MSMEs and Small Medium
Enterprises (SMEs) operators in various sectors of the economy. In addition,
they urged commercial banks to relax their conditions for granting SMEs loans
to enhance productivity and development. One of the Panellists, Mr Tony
Opanachi, CEO/Managing Director of Development Bank of Nigeria (DBN), said the
Bank was working toward addressing some of the challenges of SMEs, especially
funding and risk related issues impeding the growth. He said that the bank
would provide long term credit for SMEs through financial banks/intermediaries,
build capacity of entrepreneurs as well as share partial credit guarantee. The
expert said that the effort would ensure sustainable flow of credit to the SMEs
segment of the market. “If you want to run a sustainable business, you can’t
run away from the micro environment that you have and DBN is set to run a
sustainable business. “We are trying to avoid mistakes of the past, where you
come out with intervention funds they dry up, but there’s no sustainability.
One of the key things DBN is doing differently is to run a sustainable business
over time. “If you look at that segment, the micro for example, how are they
being served in terms of debt equity? Most of the micro finance institutions
basically focus on micro and learn the act of lending to micro businesses. “So
the bank for example is coming to provide that capacity for them to ensure that
they are able to lend to more,” he said. Also speaking, Ade Ayeyemi, the Group
Chief Executive Officer of Eco Bank emphasised the need to deepen the capital
market. Ayeyemi stressed the need for SMEs to have ideas of how to run a
business with profit equation while government should bring down the 17 per
cent inflation rate to the barest minimum to enable the commercial banks to
intervene. According to him, this is what is obtainable in neighbouring
countries with lower inflation rates. He said the government should also create
local condition for wealth creation and provide enabling environment for
businesses to thrive. The chief executive officer noted that this would make
Nigeria an attractive destination for the foreign money to come in and enable
the country to compete with the rest of the world. “So if we do formalisation
of businesses, allocation of pension funds, getting the ministries to do the
capacity support for SMEs then we are beginning to make way forward,’’ In his
remarks, Kamoru Bakrin, the Chief Executive Officer of Helios Investment
Partners said the firm raised 1.5 billion dollars in 2016. Bakrin, however,
noted the dearth of investable opportunities in Nigeria and Africa. He advised
stakeholders to invest time and resources in developing capability in the
sector. Also speaking, Nasir Yammama, the Founder Verdant Agritech Ltd, spoke
on the need for data generation in order to boost access to capital, adding
that a lot of farmers had joined the value chain. He observed that most
entrepreneurs get access to funding outside Nigeria while others generate funds
personally. “De-risking MSMES is key and the Nigeria Incentive Risk Sharing
Agricultural Lending (NIRSAL) is already taking the lead in addressing the
risk concerns of farmers who make up the bulk of the 37 million MSMES
sub-sector. “For me, capacity development is key for entrepreneurs to be able
to make head way. Entrepreneurs must invest in developing capacity which would
enable them attract private capital and affordable funding.’’ Yammama, a
representative of Entrepreneurs also observed the difficulties being
experienced by business owners in accessing capital. He said that the country
must develop conventional financing system to help the SMEs in getting capital.
The expert also advised young entrepreneurs to have a clear cut idea in their
plans that would attract investors. “In my experience plan, the first business
I have ever written I got a lot of help. No one can do it alone. You have to
reach out to the right people. “I went to the British Library and found a whole
business clinic, so there is need for capacity development. “If the banks are
tired of seeing entrepreneurs with weak business plans, then they should invest
in building their capacity,’’ he said.
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