Femi Folaranmi, Yenagoa
The Director-General of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Dr Dikko Umaru Radda, has stated that the Federal Government is determined to use rating of Micro, Small and Medium Enterprises (MSMEs) to galvanize the growth of the sub-sector and revamp Nigeria’s economy through unhindered access to finance.
Radda whose keynote address was presented by the SMEDAN Bayelsa State Manager Mr Abilo Uboboso during an MSMEs Stakeholders’ Sensitization Program organised by the Agency in Yenagoa, disclosed that the programme was held to acquaint stakeholders at the state level of the Federal Government’s intention to establish, through the collaborations of SMEDAN, BOI, NEXIM Bank and other stakeholders a rating agency to be known as Small and Medium Enterprises Rating Agency of Nigeria (SMERAN) and to request for their invaluable inputs .
‘Majority of MSMEs operates as informal entities and therefore lacks the capacity to maintain the minimum corporate governance standards. As a result of this, most fund providers do not trust or have enough confidence to extend loans to enterprises whose track records are neither known nor easily verifiable.
‘Such businesses are perceived to have higher probability of credit default and most often default when funds are extended. This is mostly due to the fact that they do not have access to affordable funds, amongst other resources.
‘The establishment of SMERAN is intended to reduce turnaround time for MSMEs to access funds and other critical resources, as well as position them to development their businesses and sustain growth,’ he said
The DG while commending the Bank of Industry (BOI) and NEXIM Bank for working with SMEDAN to champion the establishment of the proposed SMERAN, said that aside from the agency providing rating and advisory services, it would also help to enhance business credibility and improve corporate governance.
SMEDAN South-South Zonal Coordinator, Mrs. Omubo-Pepple, Anyam Linda during the presentation of the technical paper, stated that SMERAN is the game changer for the rapid development of MSMEs and the catalyst for the speedy growth the economy.
She urged representatives of BMOs, Financial Institutions, MDAs and other stakeholders present at the program, to encourage their members and clients to take advantage of the ongoing MSMEs mass registration programme to register their businesses (formal and informal).
‘The Federal Government has realized that the time has come to establish a rating agency with international best practice in the country, to assist MSMEs which are plagued with myriad of challenges hindering their growth, especially in the area of access to affordable funds,’ she stated.
The proposed agency will function independent of the MSMEs, financial institutions (FIs) and the business development service providers (BDSPs) to ensure that MSMEs are given impartial ratings which meet global standard for easier and faster access to both local and international resources needed for rapid development.