Following the strict access to loan for small and medium enterprises, the Small and Medium Enterprises Development Agency (SMEDAN) has called for the use of Bank Verification Number (BVN) as collateral to access micro-credits by the Micro, Small and Medium Enterprises (MSMEs).
The Director General of the agency, Dr Dikko Radda, made the call in Uyo at the 11th meeting of the National Council on Industry, Trade and Investment organised by the ministry.
Dikko said that the banking industry could consider the BVN as adequate requirement to provide micro-credits to the MSMEs since it had been embedded with critical details of the owner.
Decrying lack of access to affordable finance by MSMEs, he expressed optimism that as Mpesa revolutionised access to finance in Kenya, BVN could create access to finance for informal entrepreneurs in Nigeria.
“This can change the story line of the sub-sector.
“The Nigerian banks can look at the idea as an option to provide micro-credits to boost the MSMEs and foster economic development,” he said.
Presenting a paper entitled, “The Role of Small and Medium Enterprises and Entrepreneurship As Bedrock for the Development of Developing Economies’’ he decried many challenges facing the MSMEs.
He identified lack of access to affordable finance as one of such challenges.
Dikko said the challenges notwithstanding, MSMEs played pivotal role in economic development beyond employment generation to creating opportunities for Foreign Direct Investment (FDI).
He also noted that MSMMEs had contributed to technological innovation, helped in addressing youth restiveness and insecurity and improved standard of living as well as direct creation of wealth and reduction of poverty.
The Director-General also said that MSMEs’ contribution to the manufacturing sector and Gross Domestic Product was significant in terms of share in total value added.
Citing the 2017 MSMEs survey report, he noted that there were over 41 million MSMEs in four major sectors in Nigeria (wholesale and retail trade, agriculture, manufacturing and accommodation).
According to the report, some of the MSMEs usually experience closure of business due to lack of funds, economic meltdown, and low patronage and inadequate power supply.
He called for increased pool of fund and patronage to enable MSMEs take advantage of African Growth and Opportunity Act (AGOA) and African Continental Free Trade Area agreement export windows.
The MSME boss also called for increased patronage of MSMEs in the procurement process of the federal, state and all local governments, to address the issue of access to markets.
