News Column

FG Directs Boi to Increase Credit Facility to MSMEs

July 23, 2014

Phillip Oladunjoye

The Federal government has directed the newly inaugurated board of the Bank of Industry to increase its current credit portfolio to the Micro, Small and Medium enterprises sector.

Minister of Industry, Trade and Investment, Olusegun Aganga, gave the charge during the inauguration of the Board of Directors of the Bank of Industry in Abuja.

Aganga noted that the current arrangement where less than 15 per cent of the bank's loan funds were being set aside for the development of the MSMEs Sector was no longer acceptable, adding that the board should carry out an upward review of the loan funds in a manner that would enable the sector create more jobs and generate wealth.

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

"I would like to use this occasion to remind BoI that the future of the MSMEs rests squarely on how responsive you are to the funding needs," the minister said, advising the board to adopt the practice in China and Indonesia where significant portions of loan-able funds without collateral were extended to the MSMEs in those countries and about 97 percent of the loans were repaid.

The Minister said the Federal government would continue to give policy guidance to the bank towards achieving its mandate, while also directing the newly inaugurated board to forward quarterly progress report of the bank's activities to the Ministry.

Chairman of the board, Alhaji Abdulsamd Rabiu, said the BoI would continue to work with the government to industrialize the country.

He said the bank had identified key sectors of the economy for support in the course of providing access to finance.

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Source: AllAfrica

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