Even as efforts are being made to ease access to credit for the Nigerian manufacturing and agricultural sectors, the Central Bank of Nigeria (CBN), recently released guidelines on single digit interest rate which it expects will help grow the economy.
Under the new guideline, agricultural, manufacturing and the sectors considered as growth and employment stimulating, can now borrow long term as much as N10 billion at consolidated nine percent interest rate. The CBN Monetary Policy Committee (MPC) had at its 119th meeting, introduced its revised guidelines for Accessing Real Sector Support Facility (RSSDF) through Cash Reserves Requirement (CRR)/Corporate Bonds (CBs).
The Deputy Governor, Corporate Services Central Bank of Nigeria, Mr. Edward Adamu, who said that MSMEs accounted for an estimated 96 per cent of enterprises in the major contributing sectors including Information and Communication, Mining and Quarrying, Agriculture, Transportation and Storage, as well as Other Services, noted that MSMEs in Nigeria, are faced with a number of hurdles that include low access to finance, poor infrastructure, multiple taxation, regulatory burden and sub-optimal implementation of the provision of the MSME policy.
Although previous interventions were unable to achieve desired results of promoting access to finance by MSMEs and the informal sector due to factors inherent to the MSMEs, including absence of unique identification, poor managerial practices, inadequate financial education, lack of acceptable collateral and their inability to prepare acceptable business proposals that meet the strict lending requirements of financial institutions, the latest initiatives are expected to provide the needed reliefs.
In addressing these challenges, Adamu explained that it was crucial to improve access to finance to budding professionals in entrepreneurial activities. Given the dynamic business environment within which MSMEs operate in Nigeria, it is important for financial sector stakeholders to respond creatively by evolving new financing initiatives that complement the conventional financing instruments.