- DBN’s disbursement to SMEs hits N512bn in five years
The Nigerian Export Promotion Council (NEPC) has equipped Micro Small and Medium Enterprises (MSMEs) in export businesses with available finance options in its bid to drive the nation’s non-oil export sector.
In fact, the council stated that the decision was appropriate in light of the country’s diminishing economic resources and its excessive reliance on oil resources.
This was said during a workshop on export financing that the council organized in Lagos, according to the executive director of NEPC, Dr. Ezra Yakusak.
The workshop, according to Yakusak, who was represented by Esther Ikporah, Deputy Director, Export Development and Incentives, could not have occurred at a better time than now given the nation’s economy’s continued decline and the skyrocketing costs of goods and services. She also noted that the issue of financing has evolved into one of the biggest challenges MSMEs in the export sector currently face.
Meanwhile, the Chief Economist, Development Bank of Nigeria (DBN), Prof. Joseph Nnanna, said that the development bank’s disbursement to SMEs has hit over N512 billion to more than 225,000 MSMEs in five years.
According to the NEPC boss, in countries all over the world MSMEs still remain the driving force of the economy, stating that financing is the fuel that accelerates the growth in any industry.
“For our economy to move forward, exporting MSMEs must be aware of the various finance options that are available to them and they must be acquainted with the several intervention opportunities available to fund their business enterprise.
“It is common knowledge that funding provides a cash flow solution to exporters who sell internationally; reasons being that the terms of payment between the supplier and the buyer are usually settled at a later date. Export finance gives the MSME opportunity to gain access to working capital before the clients in the other country pays for products ordered for”, he said.
He emphasized that every business has two main objectives: to turn a profit and expand, and he added that export finance enables MSMEs to grow and improve.
The Chief Economist claimed that for his part, 67% of women and 27% of youngsters have so far profited from the payout.
He also mentioned that more than 18,669 MSMEs in economically underdeveloped areas including Borno, Adamawa, Katsina, Yobe, Zamfara, and others have received N10.3 billion in funding to date.
He said despite the SME segment identified as critical by banks and the Central Bank of Nigeria (CBN), MSMEs account for only five per cent of commercial bank’s total loan portfolio, attributing the low participation of commercial bank in providing finance to MSMEs to poor knowledge of the SME sub segment.
Citing some of the common reasons for banks rejecting SME loan applications, he identified lack of collateral, problems with credit history, insufficient profitability and incompleteness of loan applications.
The Regional Coordinator, South West, NEPC, Mr. Samuel Oyeyipo, represented by the Head of Department, Product and Market Development, Mrs. Ofonedu Florence, expressed the conference is targeted at enabling participants’ access information needed to enhance their access to funds for export business expansion, scale up the quality of their products and increased market access.
“It is pertinent to explain that in your work as exporters lies the responsibility of ensuring effective utilisation of funds and enhanced skill so as to be able to achieve uniform standards which are capable of producing comparable, reliable, consistent products and packaging that would be acceptable in the world market,” he said.
