Tuesday, 22 July 2014
FG to Review 15% Loanable Fund for Small Scale Businesses.
Minister of Trade, Industry and Investment, Mr. Olusegun Aganga
Dissatisfied with the current 15 per cent loanable funds for small scale businesses in Nigeria, the federal government yesterday directed the Bank of Industry (BoI) to review the loan portfolio to operators of the sector in order to achieve rapid industrial development in the country.
Minister of Trade, Industry and Investment, Mr. Olusegun Aganga, who gave the directive while inaugurating an eight-man Board of Directors for the bank led by the chairman, Alhaji Abdulsamad Rabiu in Abuja, maintained that the range is abysmally low and therefore unacceptable.
Aganga said the need for the upward review of the loan portfolio could not be over-emphasised in view of the multiplier effects of Small, Medium Enterprises, SMEs on the nation’s industrial base, employment generation drive and its potential contribution to the growth domestic product, GDP.
He said: “The current arrangement where less than 15 per cent loanable funds is being set aside for MSMEs need is unacceptable and must be reviewed upwards having regard to the potential of the sector to create jobs and generate wealth
“The practice in China and Indonesia where significant portion of loanable funds in most cases without collateral is extended to MSMEs with close to 97 percent repayment rate should encourage you to emulate and do even more for Nigeria’s MSMEs."
In line with the administration’s quest to leverage on the nation’s new economic status to manifest on the people's lives, the minister urged the board members to brace up for working, adding that his ministry track the performance of the board on a quarterly basis.
“I expect your board to forward to me quarterly progress reports showing performance in the quarter and year to date with details of analysis of loan book by gender, by sector, impact on National Industrial revolution Plan, NIRP and National Enterprise Development Programme, NEDEP, job created and contribution to national development."
In order to achieve the desired results, Aganga charged the board to formulate good policies, set target, monitor project and programmes that would drive the operations of the bank and encourage growth in priority sectors of the economy.
The minister urged the newly constituted board to work with other sector players with a view to achieving government's vision in establishing the bank.
“The bank and its board are expected as partners, in the business sphere, to share in the common national vision towards achieving those objectives for which the bank was established.
“This should and must be done with every sense of duty to ensure striking a balance between the bank's quest for higher dividends and its social obligation to the nation," Aganga stressed.
In his remarks, Chairman of the board, Alhaji Abdulsamad Rabiu, expressed readiness of the bank to work to ensure the attainment of the nation’s technological transformation agenda through wealth and jobs creation.
Rabiu said that the bank was committed to its mandate of supporting industrialization of the nation’s economy.
Responding to questions, the new Managing Director/Chief Executive of BoI, Mr. Rasheed Adejare Olaoluwa assured that the management would work hand-in-hand with the board with a view to strengthening the bank’s operations for global competitiveness.
Olaoluwa said the task of increasing the contribution of the manufacturing sector to Nigeria’s Gross Domestic Product cannot be undertaken by BoI alone.
For the bank to effectively deliver on its mandate, he said the institution would have to work closely with other relevant stakeholders towards addressing the non-financial issues facing the manufacturing sector and Micro Small and Medium Enterprises, MSMEs.
“Urgent steps would have to be taken to improve on BoI’s service delivery to enable it meet the unemployment challenges facing the country especially in the areas of wealth and job creation”, the managing director added. THISDAY