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Loans Alone Can’t Help SMEs To Succeed – CBN

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The Central Bank of Nigeria has charged microfinance banks to come up with other ingenious measures that will enable Small and Medium-scale Enterprises to succeed, as the provision of loans alone is not enough.

According to the CBN, microfinance institutions that provide credit to small business owners should further support their clients by enlightening them on the various opportunities that will help SMEs succeed in their ventures.

The Managing Director/Chief Executive Officer, Nigeria Inter-Bank Settlement System Plc, and Deputy Governor-designate, CBN, Adebisi Shonubi, who stated this while speaking at the 10th year anniversary programme of Hasal Microfinance Bank Limited in Abuja, however, noted that the provision of loans to SMEs was vital.

“When we talk about credit to small businesses from microfinance institutions and others, it is not just about giving people money, but it is to also give them the opportunity to succeed. So, we should come up with other ingenious measures to support our small businesses to succeed,” Shonubi said.

In her address at the event, the Director, Other Financial Institutions Supervision Department, CBN, Tokunbo Martins, stated that the apex bank had continued to place emphasis on thorough regulation in order to guard against failure in the microfinance banking sector.

Martins, who was represented by the Deputy Director, Administration, OFISD, Kehinde Omole, said, “I know Hasal is going to achieve a national status before long, however, it is important to note that the CBN places great emphasis on regulation.

“This is to ensure that we have a healthy MfB sector so as to have a strong financial system that can catalyse growth and impact positively on not just the businesses that operate in that sector, but on the overall economy of Nigeria.”

The Managing Director/Chief Executive Officer, Hasal MfB, Rogers Nwoke, noted that microfinance banks had been supportive of small businesses in Nigeria and urged small and medium entrepreneurs to support the MfBs across the country.

He said, “The MfBs are established to include everybody in the national financial system. For those who have been excluded and feel that the big Deposit Money Banks do not care for them, let them come to microfinance banks. Our job is to provide banking services to people who want those small loans that the big banks cannot give.

“The MfBs are in a position to give loans. Small business owners should stop rushing to where it will be difficult to access loans for their businesses. When you look for, say N100,000 or N200,000 from a commercial bank, they will tell you to go to a microfinance bank. So, small businesses need to understand this.”

Nwoke, who doubles as the President of the National Association of Microfinance Banks, stated that Hasal had disbursed about N50bn to over 60,000 small business owners since it started operations a decade ago.

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