The Abuja Chamber of Commerce and Industry on Monday has said that the current funding mechanism for Small and Medium Enterprises in Nigeria is defective as it does not support the growth of the sector.
It described the current arrangement where SMEs are asked to provide collateral for loans as discouraging because many of them don’t have the type of collaterals that banks required for the disbursement of the intervention funds.
The President of ACCI, Adetokunbo Kayode, said these at the opening session of the 14th edition of the Abuja International Trade Fair.
Kayode said that despite the huge intervention funds pledged by the government for the sector, many entrepreneurs that should benefit are unable to meet the requirements.
To address the funding challenge of the sector, Kayode said a private sector driven SME funding Development Finance Institution would soon be proposed to the Governor of Central Bank by National Association of Chamber of Commerce, Industry, Mines and Agriculture.
He urged the apex bank to give the proposal when submitted speedy consideration in view of the fact that SMEs were in serious need of funds.
He also urged the government to assist the sector through finance leasing, which provides for direct procurement of capital equipment by funding agency to the SME.
Vice President Yemi Osinbajo who declared the trade fair open assured the chamber that government was doing everything possible to address the challenges facing small businesses.
Osinbajo who was represented at the event by the Minister of State for Industry, Trade and Investment, Maryam Katagum, said a lot of initiatives had been put in place to make the business climate less hostile.