– Dr. Umar Radda
The Director General, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Dr. Umar Dikko Radda, has said that talks have begun with the Central Bank of Nigeria (CBN) to open a microfinance bank to cater to the financial needs of Micro Small and Medium Enterprises (MSMEs) in the country.
One of the challenges faced by MSMEs in Nigeria is the lack of access to finance as conventional banks either do not want to give loans to start-ups or provide loans at high interest rates at over 20%, thereby making it difficult for them to grow their businesses.
According to Radda, setting up the bank would “enable the Nigerian MSMEs have direct access to credit with very simplified and modern means of achieving that.” He further added that barring any obstacles; the bank would be launched in 2021, adding that it is currently undertaking a feasibility study and working to meet the requirements of the CBN.
To ensure that the needs of MSMEs are met, the bank will be jointly owned by some MSMEs organizations and cooperatives that will be members of the board of directors.
Dr. Radda also announced that a new MSMEs policy had been finalized and mentioned major changes in a policy centered on the nomenclature, classification, and the definition of MSMEs. He said that MSMEs are usually defined based on asset and labour, however, they will now be defined based on turnover as well as the number of people employed.