Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has signed a memorandum of understanding(MoU) with two banks to enable Small and Medium Enterprises (SMEs) get access to capital at a single-digit interest rate for the purpose of work capital, workplace procurement, and also for work equipment.
Director-General, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN),Charles Odii who disclosed this to The Nation on the sidelines of the launch of the Sustainable Systems for Research and Innovation Financing (SSRF II) and Nigeria Enterprise Support Organisations (ESO) project funded by UK ’s Research and Innovation Systems in Africa (RISA) in Lagos, disclosed that agency has reached an agreement with Bank of Industry and Sterling Bank for financial support for small business owners.
He said: “If you look at the Nigerian landscape finance capital for small businesses in general is very scarce and expensive. So, one of the things that we want to do is to unlock capital for small businesses. We have signed N5billion loan deal with Sterling Bank, N1 billion with Bank of Industry .We have gone to different states. We have done the same with Enugu, Anambra and Katsina states. All this is to lay the foundation to support bank growth through small businesses.”
According to him, if small businesses access these funds, they can start and upscale their enterprises in Nigeria.
Odii expressed the readiness of the agency to champion the current administration’s economic prosperity agenda, particularly by addressing obstacles hindering SME growth and protecting them from inflationary pressure.
Speaking during the ceremony, the Chief Executive , Impact Investors’ Foundation (IIF)/Nigeria, Maria Etemore Glover, said the foundation is mobilising both government and private sector participation towards building an ecosystem for strengthening the practice of Impact Investment which is a source of capital to fund the Sustainable Development Goals (SDG) financing gap.
According to her, the Federal Government has provided 50 per cent of the seed capital for the establishment of the Nigerian Wholesale Impact Investment Fund.
She explained that the Nigeria Wholesale Impact Investment Fund (WIIF) conceived and championed by concerned stakeholders comprising the National Advisory Board for Impact Investing (NABII), IIF, Ford Foundation, and Nigeria Competitiveness Project – a GIZ-funded programme was created to drive sustainable and impactful investment in the country by channeling financial resources into projects and enterprises that generate positive social and environmental outcomes, alongside financial returns.
According to her, both Nigeria and Ghana face challenges in providing innovative ventures with adequate access to patient capital as an estimated $5 billion financing gap exists annually for SMEs in Ghana, and a staggering $32.2 billion for Micro, Small, and Medium Enterprises (MSMEs) in Nigeria.
She attributed this to lack of a robust pipeline of investment-ready businesses stemming from the inadequate capacity and inconsistent quality of Enterprise Support Organizations (ESOs). Additionally, she mentioned a scarcity of transaction advisory services and efficient channels to connect businesses to investors.
She noted that IIF Nigeria and Impact Investing Ghana (IIGh) received a funding from RISA Fund to scale sustainable systems for enterprise and innovation financing across Ghana and Nigeria through the Deal Source Africa and Enterprise Support Organisation programmes as part of the second phase of RISA Fund’s Scaling Systems for Research & Innovation Financing (SSRIF II).
As part of the mission of IIFNigeria to contribute to transforming the innovation and financing ecosystem and continuous unlocking of significant and sustainable financing for innovative ventures and enterprise support organisations, she said the agency launched the SSRF II to mobilize research, financial and physical resources to groom and support enterprises with viable business models in Africa by strengthening their capacity to attract impact capital.
Country Lead, RISA, Alice Omisore-Dada said the multi-country project, funded by UK International Development to support research and innovation systems strengthening in Africa.
According to her, the RISA Fund is supporting enhancement of the R&I systems in six nations: South Africa, Ethiopia, Ghana, Kenya, Nigeria, Rwanda, and Kenya.
By Daniel Essiet-The Nation
