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Access to finance not main problem of SMEs – NEXIM Bank CEO

18 Sep 2018
Financial Nigeria

Summary

Mr. Abba Bello said innovativeness and entrepreneurship development, rather than lack of access to finance, are the main challenges faced by Small and Medium Enterprises. 

Managing Director/Chief Executive, Nigerian Export-Import Bank, Abba Bello

The Managing Director/Chief Executive of Nigerian Export-Import Bank (NEXIM Bank), Mr. Abba Bello, has said innovativeness and entrepreneurship development, rather than lack of access to finance, are the main challenges faced by Small and Medium Enterprises (SMEs). Mr. Bello stated this while presenting a Keynote Address on Wednesday at the SME Exhibition and International Investment Forum, which held on September 12th-14th September, 2018 at the Landmark Event Centre, Victoria Island, Lagos.

“Distinguished Ladies and Gentlemen, please permit me to correct this notion, that the main problem of SMEs is lack of access to finance," Mr. Bello said during his Keynote Address. "Indeed, contrary to this, empirical evidence has shown that the main problem of SMEs is improper project conception, coupled with poor project implementation and poor management practices.”

The MD/CEO of NEXIM Bank, who spoke on the topic: “SME Innovativeness and sustainable growth; issues, Challenges and Way Forward for Nigeria,” said these are issues that have to do with innovativeness and entrepreneurship development, rather than lack of access to finance.

Mr. Bello called on the private sector to embrace entrepreneurship development and capacity building through partnership with organisations such as the Small & Medium Enterprises Development Agency (SMEDAN) and similar institutions to ensure relevant training and re-training of entrepreneurs so as to acquire and continuously develop relevant business management skills.

He also added that the Nigerian educational curricular should incorporate entrepreneurship development and emphasise science and technology, while more attention should be given to the support of Research and Development, given the global trend towards knowledge economy.

"In NEXIM Bank for example, we have developed some funding schemes, specifically targeted at the Small-Scale Exporters. However, often times, many of the target beneficiaries find it difficult to access the funds simply because of their inability to come up with bankable projects, which essentially is a problem of poor entrepreneurial education, rather than lack of finance," said the MD/CEO of NEXIM Bank, the Nigerian Government’s official trade policy bank.

The investment forum was organised to showcase Nigerian entrepreneurs, particularly the SMEs, and also provide a platform for the exchange of views to help develop the SME non-oil export value chains.

"SMEs globally are regarded as the bedrock of development in any economy, contributing significantly to jobs creation, poverty reduction and equitable distribution of wealth," Mr. Bello stated in his Keynote Address. "In terms of sectoral spread, SMEs are found in almost all the sectors of the Nigerian economy including Agriculture, Manufacturing, Solid Minerals, Wholesale & Retail Trade, Construction, Creative and Entertainment Industry, Information and Communication Technology, Finance & Insurance as well as the Professional Services sector to mention a few."

He said this broad-based spread of SMEs underscores the current efforts of government to diversify the economy and achieve rapid economic growth under the Economic Recovery and Growth Plan (ERGP). He added that proper policy responses must focus on the issues and challenges affecting the growth of the SME sector.

Mr. Bello affirmed the Bank’s continued support to SMEs, through financial support to exporters in the target sectors of Manufacturing, Agro-Processing, Solid Minerals and Services. He said over N25 billion was recently approved by the Bank for applicants under the N50 billion Export Development Fund (EDF).

"Since the inception of the Bank in 1991, we have supported over 1,000 SMEs, many of which have grown from start-ups to become enlisted among the top 100 exporters published annually by the Central Bank of Nigeria," Mr. Bello said.

He added that loans have already been disbursed to SMEs that have met the pre-disbursement conditions for the EDF. The N50 billion EDF was conceptualized as a regional/state intervention scheme, targeted mainly at the SMEs to accelerate industrialization, economic diversification and exports. The fund, as well as the N500 billion Non-oil Export Stimulation Facility (NESF), were established by the Central Bank of Nigeria (CBN).

The intervention schemes are predicated on the broad philosophy of “Produce, Add Value and Export” (PAVE) policy, which aims to encourage exporters to advance from the export of raw materials to value-added exports. Mr. Bello also informed the gathering that NEXIM has started to receive and process applications under the NESF.


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