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Bankers’ Committee Reiterates Strategic Importance Of MSMEs To Economic Growth

Bankers’ Committee Reiterates Strategic Importance Of MSMEs To Economic GrowthThe Bankers’ Committee and the Central Bank of Nigeria (CBN) have once again reiterated the strategic importance of the Micro, Small and Medium Enterprises (MSMEs) to the growth of the nation’s economy. This was stated at the workshops in Abuja and Owerri on the N220 billion Micro, Small and Medium Enterprise Development Fund organised by the Bankers’ Committee’s sub-committee on Economic Development, Sustainability and Gender in collaboration with the CBN.

In his opening remarks, Mudasiru Olaitan, director, Development Finance Department, CBN, said the essence of the workshop was to get the Deposit Money Banks (DMB) to key into the strategic plan of the CBN for the MSMEs.

“MSMEs are the engine room for economic growth, vehicle for job creation, tools for poverty alleviation and wealth creation for any country’s economy, so there is need to support them to grow so that the economy can grow,” Olaitan said.

In his presentation, Tobin Jonathan, assistant director, MSME Development Fund, CBN, said the workshop was organised to cross-fertilise ideas and bridge the knowledge gap on the MSME sector by the lending institutions and to also correct the wrong perception of the risky nature of the sector.

According to him, “the rejection rate of MSME applications by commercial banks is very high. We are aware that, this is necessitated by the banks’ aversion to risk due to lack of entrepreneurial skills and poor governance structures of most MSMEs, hence the necessity of the workshop to enlighten the bankers and encourage them more on the need to partner with us on the need to grow the sector.”

In his own presentation titled “Movable Collateral, Registry Reforms and MSME Financing in Nigeria,” Olasupo Musa of the Monitoring and Evaluation department, National Collateral Registry said, CBN is collaborating with International Finance Corporation (IFC) to establish a National Collateral Registry to stabilise MSME financing and also boost the confidence of Nigerian banks in playing active roles in financing the real sector in Nigeria, most especially the MSME sector.

To him, the MSME sector is an important catalyst for economic growth and financing the sector needs serious attention. Globally, collateral for MSME is moving away from fixed assets to movable assets, hence the need to establish a collateral registry for the finance industry. We are excited to partner with IFC on this initiative,” Musa said.

It would be recalled that that the N220 billion MSME intervention fund was launched by Federal Government in August 2014, to stimulate growth in the sector as a means of strengthening the link between the entrepreneurs and access to financial services.

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