News Column

Govt Admits Poor Funding for SMEs

July 16, 2014

Sunday Michael Ogwu

The federal government has called for the upward review of the 15 percent of loan-able funds set aside by Bank of Industry (BOI) for Macro Small Medium Enterprise (MSME), saying it is insignificant.

The Minister for Industry, Trade and Investment Olusegun Aganga, made the call while inaugurating the new board of the Bank of Industry (BOI), led by the Chairman Mr. Abdulsamad Rabiu and Rasheed Olaoluwa, the Managing Director, in Abuja, yesterday.

Aganga said: "We have to scale up effort and do far much more than we have done in the past. The current practice where about 15 percent of loan-able funds is being set aside for MSME is unacceptable and must be reviewed upwards with regards to the potentials of the sector to create job and generate wealth.

The core mandate of BOI is to provide long term financial assistance to large, medium and small enterprises in addition to expansion, diversification and modernisation and rehabilitation of existing industries."

In 2001 the bank was reconstituted following a successful institutional, operational and financial restructuring programme which transformed the BOI into a profitable institution.

While addressing the new board, Mr Aganga said: 'The future of the MSME as a sector rests squarely on how responsive you are to their funding needs. Our objective is not just to grow our economy but to have inclusive and sustainable growth."

The MSME sector, according to a 2010 survey, employed about 32 million people, accounting for 45 percent of our current GDP.

The minister charged the new board to forward to his office, a quarterly report with details of their performance, the jobs created, record of loan given to gender and general contribution to national development.

The chairman of the board Abdulsamad Rabiu in his response said: "The bank is willing to back quality projects that will have huge impact on the productive sector and the development of the socio-economic living standard of the Nigerian populace. We will bring the bank closer to the people we serve"

Observers at the inauguration who spoke to our reporters said the role and importance of BOI is to add value to the country's raw materials and export finished and complete products to get a higher share of the global wealth.

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Source: AllAfrica

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