FG provides N75bn intervention fund for SMEs

Olusegun Aganga

The Federal Government,on Thursday, said that it had set aside the sum of N75bn as a special intervention fund for the development of small and medium-scale enterprises.

The policy setting up the Micro Small and Medium Enterprises defines a micro enterprise as a business unit that employs less than 10 workers and whose asset base is less than N5m.

It defines a small business as one, which has between 10 and 49 employees and an asset base of between N5m and N50m. The policy also stipulates that businesses with between 50 and 199 employees, with total assets of between N50m and N500m, should be categorised as medium-scale businesses.

Addressing journalists during the inauguration of a programme aimed at ensuring a viable SME sector, the Minister of Finance, Mr. Olusegun Aganga, said that the fund, which was currently at the custody of the Bank of Industry, would help the sector to become a major contributor to the country’s Gross Domestic Product.

The minister, who is also the Chairman of the National Economic Management Team, said his interaction with members of the NEMT had enabled him to identify the bottlenecks in the way of the sector’s growth.

The bottlenecks, according to him, include SMEs’ inability to gain access to credit due to lack of training and capacity.

He also said that the high cost of doing business in the country, owing to infrastructure deficit, was another problem.

To enable the Federal Government to effectively address these shortcomings, Aganga said that the details of programmes intended to act as catalyst for the holistic development of the sector would be unveiled soon.

The programmes, which will be coordinated by the Enterprise Development Service of the Pan African University, will bring together entrepreneurs and businesses, which have strong growth and job creation potential.

It will also expose the best of the entrepreneurs to capacity development programmes at specific EDS centres; ensure that they have access to credit, as well as invest in the development of specific industrial clusters, which have promising prospects for economic growth and job creation.

Aganga said, “We have identified the bottlenecks to the growth of these sectors. Therefore, the NEMT has sought to establish programmes that will reduce the high cost of business, increase the quality of training and improve capacity building for businesses.

“The Federal Government has committed a seed capital of N75bn or $500m to the custody of the BoI, specifically for the purpose of lending to SMEs and Small Growing Businesses in the country.

“This money will be channelled directly to SMEs on terms suited to improve the competitiveness of the sector with no reversion to moral hazards.”

Also speaking at the event, the MD, BOI, Mrs. Evelyn Oputu, said the move would help to change the country’s economic landscape.

To underscore the importance of this sector, Oputu said that the bank, in the last five years, had committed about 85 per cent of its resources to SMEs.


 source:http://www.punchng.com