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HomeCompany NewsSMEDAN moves to float Microfinance Bank to boost SMEs sector

SMEDAN moves to float Microfinance Bank to boost SMEs sector

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The Small Medium Enterprises Development Agency (SMEDAN) plans to float a Micro Finance Bank (MFB) that will specially cater for the funding needs of the Micro, Small and Medium Enterprises (MSMEs) in the country.

According to the New Director General of SMEDAN, Olawale Fasanya the agency is already partnering with the private sector operators who will be joint owners of the new microfinance lender.

Fasanya, who spoke at a briefing in Lagos this week said the agency intends to own 40 per cent stake in the bank while other partners will own the balance 60 per cent structure.

The lender, which is expected to provide single-digit credit facilities to support the business of SMEs, may likely start operation by the end of 2022.

The 2013 Revised Regulatory and Supervisory Guidelines by the Central Bank of Nigeria (CBN) stipulates a N2 billion capital base for an MFB among other conditions to address challenges observed in the implementation of the Microfinance Policy of 2005 and emerging developments in the industry.

“The funds are ready and we have approached and met all the requirements of the CBN,” Fasanya told journalists in Lagos on Tuesday.

“We own 40 per cent of the incoming MFB while the remaining 60 per cent is owned by other strategic investors including Association of Women Entrepreneurs, the National Association of Small Medium Enterprises (NASME) and two other investors.”

“I believe we will take off before the end of the year”, he said.

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Nigeria has over 39 million MSMEs, providing over 60 million employment and contributing 49 per cent to the Gross Domestic Product(GDP) according to the last national survey of the SMEDAN/NBS.

The sector, however, is encumbered with finance and other fundamental challenges like market, equipment, information, technical and entrepreneurial skills and workspace.

The Agency is present in all the 36 States of the Federation with Zonal Offices in different parts, but Fasanya said it will start with a branch of the MFB before expanding to other parts of the country.

”We will start with one branch and expand to other parts of the country. The kind of license that we seek from the CBN is the type that can make us have other branches.”

The bank is a child of necessity and Fasanya said the agency will get other interested parties so that it doesn’t interfere in the operations.

“We will be on the board but we will run it like a private sector organisation without government interference.”

SMEDAN’s presence on the board is to ensure that the SMEs that the bank is created for are the main beneficiaries.

“We want the SMEs to benefit because the interest rates of other MFBs are higher than commercial banks and this is what we are guarding against.”

SMEDAN is currently approaching many organisations including the Islamic Bank, Bank of Industry (BoI), and Development institutions to help with capital to support SMEs in the country.

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