The Bank of Industry (BoI) has unveiled plans to leverage its existing partnership with commercial banks to build its risk assets from the current N600 billion to N1.2 trillion as part of efforts to improve its intervention to Small and Medium Enterprises (SMEs).
The Managing Director, BoI, Olukayode Pitan, who was represented by the bank’s Executive Director, SME, Waheed Olagunju, during the African SME expo 2017, added that the bank had budgeted about N310 billion for SME development with an average of N60 billion yearly, but have not been able to process loans worth N50 billion to SMEs on account of viability.
Meanwhile, the State Minister, Industry, Trade and Investment, Aisha Abubakar, added that SMEs are recognisable world over as the engine of economic growth and development due to the critical role they play in job and wealth creation.
She said the theme of the expo tagged “Promoting SMEs for sustainable development economic growth” is not only apt, but timely as a result of the nation’s quest to ensure that people who are able and willing to work are actively engaged in one economic venture or the other.
She said the federal government is working hard to sustain its effort to put in place initiatives to promote the growth and development of SMEs which she said is the only way to create jobs and achieve economic growth as a country.
She said the expo will stimulate and attract foreign direct investments into the African business ecosystem which will no doubt promote investment and trade. “The future of SMEs in the continent is bright, but we must all do our part to make sure we achieve this,” she added.
Olagunju said the biggest problem facing SMEs is not financing, but being able to come up with a viable business model and bankable proposals, pointing out that statistics have shown that the country has never lacked quantum of money to support SMEs, rather SMEs have not been able to come up with bankable proposals.
In his words, “Some of the challenges hindering SMEs include lack of skill manpower, not able to meet the requirements of financial institutions, very vulnerable to shocks, but in spite of these challenges there some few successful SMEs in the country and this is want to showcase to Nigerians that it is possible to promote SMEs and run them viably and efficiently.
At the BOI, we lend to SMEs at single digit, because we are able to mobilize resources from national and sub national sources and the tenures are quite generous and because of our branch network, we are able to work closely with the SMEs.”
”The project that we support are those that have considerable developmental impact by way of job creation, projects supported by women and projects that are environmentally sustainable and those that also use a lot of local content by way of their raw materials.
“We are making a lot of progress in terms of supporting SMEs. We have come up with lots of innovative schemes to reach the entire country,” he said.He however stated that the bank’s Non Performing Loan ( NPL) ratio has consistently being about four per cent which is below the Central Bank of Nigeria ( CBN’s) threshold of five per cent which indicates that about 96 per cent of its loans at the bank is performing.