By Merit Ibe
Managing Director, Bullion Go-Neat Global Ltd, Mr Olufemi Ajadi, has urged Nigerian banks to create more loans facilities in support of Small and Medium Enterprises (SMEs) in the country.
Ajadi who spoke recently at a forum of the Commerce & Industry Correspondents Association of Nigeria (CICAN), said the move would not only help the capacity of Nigerian run companies but will also help boost the economy.
He pointed out that funding support remained critical for survival of SMEs but that the government and its agencies seemed not to appreciate that.
Ajadi said the current situation whereby emergent small firms are allowed to suffer due to the lack of finance was not auguring well for the economy, saying it was worsening unemployment situation and contributing to the spiralling prices of goods and services.
The MD said because companies are forced to source capital from mainstream banks, at usually high interest rates, they could sell at low prices.
He stated that the Small & Medium Enterprises (SMEs) regarded as the engine of growth, could only perform such roles when they are supported by government at the teething stage.
“I believe that the government can actually help SMEs in Nigeria, after all, these SMEs are helping the economy. SMEs help to create jobs, provide goods and services and should be supported by the government.”
He cited examples with other countries saying that many of them were ahead of Nigeria because they had taken time to support their SMEs.
Ajadi was of the opinion that registration procedures could be simplified for Nigerian firms just coming up rather than the current situation whereby they are slammed with multiple taxes. While acknowledging that some banks were trying by providing loans for firms, he said the conditionalities could be made easier.
“If you say some banks provide loans, how many companies have accessed such loans and what are the terms? “I still believe that if government could show interest in supporting Nigerian firms, they will give Nigerian banks strong mandates on it.
“Any bank that does not follow such a directive could be sanctioned.
“If Nigerian SMEs are supported effectively through the provision of small loans” they expand their capacity, create more jobs and help in fighting hunger and insecurity,” he stated.