To create more jobs and enhance productivity, capital market investors have urged Nigerian banks to reduce the cost of credit to the Micro Small and Medium Enterprises (MSMEs)
They argued that despite the significant contributions by SMEs to the Nigerian economy, the headwinds faced by operators in this segment are quite daunting.
The investors argued that for the sector to contribute significantly to the nation’s economic growth, there is need for commercial banks to ease access to credit for the sector.
According to them, this would impact positively on the operations of these SMEs and enable them to grow and ultimately access more funds from the capital market.
Specifically, an independent investor, Amaechi Egbo said like other economies, SME’s are critical to economic development, especially the creation of jobs and the promotion of inclusiveness in the Nigerian economy, adding that funding SMEs has remained a major challenge.
“It has been difficult to unlock the potentials in the sector partly as a result of this problem. The economic landscape in recent years has been quite challenging for corporates with small and medium scale enterprises experiencing some of the difficulties observed in the Nigerian macro landscape.
He pointed out that in high-income countries, MSMEs contribute well over 65 per cent of employment and about 48 per cent to the GDP, noting that the benefits of a well-developed MSME sector can never be over emphasized
He urged banks to create institutional support for MSME growth in Nigeria, adding that the MSME space remains critical to the growth of the economy.
“These companies have seen declining productivity rates largely caused by deficiencies in power supply; substandard trade facilitation infrastructure; lack of right sized and right-priced financing
“MSMEs constitute essential ingredients in the lubrication and development of any economy. The sector has been recognized as main sustenance of the national development because of their capacity in enhancing the economy output .
The President of Standard Shareholders Association of Nigeria, Godwin Anono urged Nigerian banks to do everything within their powers to promote the growth of the sector, especially in the areas of easing the cost of credit for the sector.
He pointed out that the costs of fund in the money market as well as tenure of funds are not in tune with the yearning of MSMEs, noting that this has constrained the growth of the sector over the years.
He urged Nigerian banks to do everything within their powers to promote the growth of the sector, especially in the areas of easing the cost of credit for the sector.