SMES LIST CONSTRAINTS ON ACCESS TO CREDIT
Small and Medium Enterprises operators on Wednesday in Abuja said gaps in information sharing and the demands from commercial banks on credits had crippled micro enterprises.
SMEs provide the engine for economic growth and poverty reduction, but many of the businesses remain trapped in small-scale cycles due to poor financing, the News Agency of Nigeria reports.
The entrepreneurs of some of the SMEs said that most of their businesses were financed by small savings, family support and grants, ruling out credits from banks.
The entrepreneurs spoke to NAN on the sidelines of the Abuja International Trade Fair.
The Manager of Dae Sung, Mr. Abdul Moses, said, 'The banks will always ask for collaterals that far exceeded the loan you are asking for.'
'Where do we get the collateral for securing loans, when we started out in business trying to secure our lives from poverty.'
He said the government, the Central Bank of Nigeria and some financial institutions had raised initiatives on financing SMEs, but non had succeeded so far due to lack of participation by the SMEs.
Moses said, 'We approached one of the banks for credit to rent an office but the procedure and the demands were so numerous. We had to fall back on relations and friends for support.
'We had some money and all we needed was to augment, but the procedures discouraged us. The interest rates were also not attractive.'
Another entrepreneur, Ms. Mary Akor, an artist and a clothing designer, said she opened an account with a microfinance bank to secure a loan and her deposit got trapped.
She said, 'They encouraged me to open an account with them so that they could give me a loan in future and now, I am struggling to get my deposit out.
'They started paying me in bits because they had no money and I still have some money stuck in there.'