Bank of Industry (BOI) is to relaunch its Micro Small and Medium Enterprise (MSME) Fund with reduced documentation
Nigeria’s Development Bank, the Bank of Industry (BOI) is to relaunch its Micro Small and Medium Enterprise (MSME) Fund with reduced documentation and longer tenure rates.
MSMEs will now be able to access the 220 billion naira fund with options of guarantors instead of collaterals.
This was disclosed by the Acting Director General of the BOI, Waheed Olagunju, at the third economic communication workshop organised by the presidency in Abuja last week.
“The BOI is to relaunch its MSME fund with reduced documentation and longer tenure rates and in some cases offering guarantors instead of collaterals,” a quote from his presentation read.
MSMEs who are looking to get anything from 1million to 9million naira will be required to have guarantors who are civil servants on the 12-grade level. While those who seek loans of 10 million naira and above will have to have to come up with a collateral, Tola Adekunle Johnson, Special Assistant to the Vice President on MSMEs explained to BusinessDay.
The MSME fund was launched by the Central Bank in August 2013 and has largely been inaccessible to its target lenders, the MSMEs, due to the stringent conditions attached to accessing the funds. The fund was to address challenges of access to capital operators in the sub-sector were facing currently. The loans were be given to entrepreneurs at nine percent interest rate and at a much longer term than what deposit money banks.
Olagunju in presentation decried that despite having an estimated 36million SMEs in the country only few can actually access loan facilitates as most have resorted to using their savings and garnering support from friends and families. Full details of the relaunched fund will be made available when launched in a few weeks.
A Facilitator at the communication workshop, Bayo Rotimi who spoke on the Anatomy of the Nigerian MSME harped on the need for capacity building both for the MSMEs and the commercial banks who are more interested in just lending out monies rather than helping the MSMEs build their capacities to manage the loans.
Noting that most of the SMEs were yet to register with tax authorities, Rotimi called for the introduction of tax holidays for those who voluntarily register adding that this will also increase
Meanwhile, the MSME clinics launched sometime in January to accelerate the ease of doing business in the country has so far reached out to about 4602 MSMEs in the three states visited.
Adekunle-Johnson explained that the Clinic which is expected to be run in 21 states across the six geopolitical zones of the country has so far visited three states with a target to reach at least 360,000 MSMEs in a year and about 1.8million MSMEs in five years.