Lack of understanding and the lengthy process, are part of the reasons why many Small and Medium Enterprises (SMEs) cannot get Bank of Industry (BoI) facilities. The Senior Special Technical Adviser, Nigerian Association of Small and Medium Enterprises (NASME), Mr. Chris John Mamuda ,revealed this in Lagos.

Quote: “Everybody just believes because that the government says there is money for loan, you just go and collect without any proper documentation and planning.For instance, if BoI wants to give loans, there are certain processes involved – ranging from the purpose of the loan and the collateral involved to other demands which you must meet. However, most enterprises don’t want to go through this process; that is the lack of understanding,”

‘’BoI’s interest rate is at nine per cent while commercial banks are at 22 per cent, and with commitment fee from BoI, it may be 10 per cent. “However, with moratorium from them, have say six months’ grace before you start repaying, but the problem is, most of these business operators still do not understand and that is why we have huge unpaid loans even from BoI. Sometimes the loans favour foreign SMEs more than the local ones,”

Mamuda also stated that over the years, SMEs have contributed to the gross domestic product (GDP) of the country and added value to products. SMEs have created jobs and promoted economic diversification scheme of the Federal Government. However, according to him, all these do not come without challenges, adding that these challenges are still inhibiting the sector’s capacity to contribute to the economy.

Quote: “The challenges are many, but I categorise them into two: internal and external. The internal challenges range from poor organisational skills, inadequate record keeping and data to know new business trends and how to catch up with international standards. There is also poor development and product packaging skills. We all know very well that you can’t grow a business when you’re not abreast with global trends and also when you don’t have adequate data to know what is in demand.

“The external challenge is where regulation, multiple-taxation, absence of business advisory support and access to loans come to play. Taxes being charged on SMEs are not encouraging, and also advisory support from the agencies is not available. Access to start-up loans is a huge challenge as there is lack of understanding of the procedures of securing such loans by the SMEs.”

https://www.financialdigest.com.ng

He's just splitting scrab...how do u expect a young entrepreneur to have collateral rth millions..., I think there should be a special consideration for startup