Lagos state advocates single digit lending rates to boost MSMEs

Eniola Ajayi, Lagos

The Central Bank of Nigeria has been called upon to ensure a downward review of lending rates in the nation’s banking industry to reflect a single digit in order to boost the Micro, Small and Medium Enterprises (MSMEs).

Lagos State Governor, Mr Akinwunmi Ambode, made this known at a Roundtable Conference organised by the National Association of Small and Medium Enterprises, Lagos State Chapter; with the theme- Reflating the Economy Through MSMEs Support.”

Governor Ambode who noted that the current double digits interest rates being charged by banks could discourage budding businesses, stressed that the Lagos State Government through its Micro-finance Bank had been able to achieve a single digit interest for borrowers.

He described small and medium enterprises as bedrock for sustainable development.

“In Nigeria today MSMEs contribute 47% of the Gross Domestic Product (GDP) and create more than half of the jobs, out of the 37 million MSMEs in the Country, 36.9 million are Micro and Small Enterprises according to Small Medium Enterprise Development Agency of Nigeria (SMEDAN) while over 17 million of MSMEs operate in Lagos State; they have been significant contributors to value addition, employment generation, income generation and appreciable poverty reduction; the increasing number of Nigerian Youth deploying their ideas, abilities and resources to start small ventures is a manifestation of the realization that MSMEs are effective sector/platform for poverty eradication since they create employment naturally.”

“It is pertinent to State that over a thousand MSMEs have been empowered through the Lagos State Employment Trust Fund Loans with single digit of 5% interest rate, the cheapest in the whole Country which allow them to increase production,” the Governor stressed.

Harmonised team

 Governor Ambode also hinted that government had set up a harmonised inspection team comprising of various revenue generating agencies so as to ease the process of tax payment and prevent multiple taxation.

The keynote Speaker, Professor Segun Ajibola challenged stakeholders in the MSMEs sector to return Nigeria to the right path economically.

Professor Ajibola who is the President, Chartered Institute of Bankers of Nigeria (CIBN) highlighted the importance of MSMEs to include economic stimulation, enhancement of technological innovation and development, as well as structural balance that would prevent rural-urban migration.

Intervention funds

The CIBN President also listed the challenges facing MSMEs, such as inadequate infrastructure, unstable government policies, high cost of legal documentation and bank interest rates, as he challenged commercial banks in the country to take advantage of intervention funds provided by the Central Bank of Nigeria.

The Chairman of NASME in Lagos State, Mr Solomon Aderoju stated that the conference became necessary due to the urgent need to move the nation’s economy towards the path of growth and find solutions to the challenges facing MSMEs.

Platform for regulatory agencies

Mr Aderoju noted that the round table was a good platform for some regulatory and government agencies to provide solutions to some of the challenges being encountered by the SME operators through harsh regulatory requirement.

On his part, the President of NASME Farmers Cooperatives, Dr Adams Olu-Adebayo called for robust tax incentives and MSME clusters where regulatory agencies could interact with the entrepreneurs as a group.

“We advocate for a cluster where people can gather together and regulatory agencies can come and give us a blanket certification while the standard of products will still not be compromised,” Dr Olu-Adebayo added.

Break-out sessions

The conference later went into break-out sessions where participants sought for fast track processing from agencies such as Federal Institute of Industrial Research, Oshodi (FIIRO), National Agency for Foods, Drugs, Administration and Control (NAFDAC) among others.

Ime Njoku