News Column

Aganga Directs BOI to Disburse More Funds to MSMEs

July 17, 2014

The Minister of Industry, Trade and Investment, Dr Olusegun Aganga, has directed the Bank of Industry, BoI, to increase lending to Micro, Small and Medium Enterprises (MSMEs) in Nigeria. He gave this directive in Abuja during the inauguration of the new board of the bank.

According to him, the current arrangement where less than 15 percent loanable funds is set aside for MSMEs' need is unacceptable and must be reviewed upward for jobs and wealth creation.

He urged BoI to emulate the practice in China and Indonesia where significant portion of loanable funds are extended to MSMEs at about 97 percent repayment rate, but without collateral. The minister reminded the new board that the future of MSMEs depended on how responsive the bank is to their funding needs.

"The core mandate of BoI is to provide financial assistance for the establishment of large, medium and small projects as well as for diversification, expansion of existing enterprises and rehabilitation of ailing industries.

"Its mandates are also anchored on creating an enabling environment to stimulate domestic investment and attract foreign direct investment into the industrial sector of the economy, " he said. He urged the board to formulate good policies, set targets and monitor projects and programmes that would drive the operation and encourage growth in priority sectors of the economy.

Aganga expressed optimism that the bank would be supportive of the Federal Government's National Industrial Revolution Plan (NIRP) and National Enterprise Development Programme (NEDEP). He, however, advised the board to forward the quarterly reports of the bank's performance on loans, impact on NIRP and NEDEP, job creation and contribution to national development to the ministry.

"There is no doubt that the bank's mission is to transform Nigeria's industrial sector and integrate it into the global economy by providing financial and business support services to existing and new industries," he said.

According to him, this will enable the industries to attain modern capabilities to produce goods that are competitive in both domestic and external markets.

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Source: AllAfrica

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