The Federal Government has unveiled plans to relax the collateral conditions attached by the Central Bank of Nigeria for banks to access the N220bn intervention fund for the Micro, Small and Medium Enterprises sector.
The Director General, Small and Medium Enterprises Development Agency of Nigeria, Alh Bature Masari, disclosed this while addressing journalists on the importance of the National survey on MSME to be conducted by the National Bureau of Statistics.
He said over the years, lack of access to finance had been identified as a major challenge facing the MSME sector, noting that the N220bn intervention fund from the CBN, would only address the funding challenge only if it can be easily accessed by small business owners.
Apart from finance, other challenges facing the sector according to him are weak infrastructure and inconsistency of government policies, lack of work space, and multiple taxation.
Part of the conditions for banks to access the N220bn fund from the CBN is the need for them to collaterise whatever amount they are applying for from the CBN to the tune of about 70 per cent.
But Masari described the 70 per cent as being too high, noting that after various consultations with the apex bank, this had been brought down to 50 per cent.
The SMEDAN DG argued that if the collaterisation of 50 per cent is allowed to stay, the entire collateral demand the CBN would be making from the banks would be transferred to the ordinary Nigerian who will ultimately apply to have these funds for enterprise establishment and development.
As part of measures to further reduce the collateral, he said a sub-committee had been set up by the National Council on MSME.(Punch)