The Federal Government and Central Bank of Nigeria (CBN) have been urged to disburse the N220 billion micro businesses intervention fund through the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN).
A cross section of stakeholders told the News Agency of Nigeria (NAN) in separate interviews in Abuja that SMEDAN’s National Enterprise Development Programme (NEDEP) was the right platform to disburse the fund.
The federal government had launched the Micro Small and Medium Enterprise (MSME) Development in 2013 to resurrect business activities in the sector of the economy. The stakeholders said the disbursement process would be marred if it was done through state controlled micro finance institutions as presently arranged.
Mr Philemon Akusu, an industrialist, said “such development would be surely inimical to the process of fast tracking the industrialisation of the country going by the attitudes of state controlled institutions’’.
According to him, “micro finance institutions across the states were the creation of state governments to misappropriate funds’’. The CBN did agree to engage micro finance banks (MFBs) with good track record and strong financial base for the disbursement of the funds. It said Participating Financial Institutions (PFIs) included non-governmental organisations (NGOs) and micro-finance institutions, which would be able to access funding at an interest rate of nine per cent per annum.
According to stakeholders, the funds would be lent to other entities with a spread of up to six percentage points per annum. The scheme is expected to provide liquidity to PFIs on a maximum three-year tenure, with most institutions limited to N5 million or N10 million.
It, however, added that national micro finance institutions would be able to access up to N1 billion.
Mr Praise Emeka, Chief Executive Officer of Praz Finance Nig. Ltd, said most intervention funds of the government that followed this module had failed.
Emeka explained that the CBN must learn to trust other arms of government saddled with the responsibility to carry out such tasks.
“You are witnesses to the lack of corporate governance and transparency in the country’s finance sector. A number of banks with huge deposits and other transaction assets were mismanaged in the past, is it micro finance institutions that should be trusted to do this disbursement?’’, he asked.
On his part, Malam Abdul Usman, an Entrepreneurm, said “if the government really want to assist people, I think a traditional method using the SMEDAN organ that has the reach would be most acceptable’’. Usman said the CBN must understand that most micro finance banks are “one-man show’’, adding that those ones that appear seemly strong were equally susceptible. “SMEDAN has the capacity to enlist the banks it desires to use in disbursing the funds and this approach that appears to empower the states government and their cronies,’’ he said.
