There is little doubt that the ecosystem for the finance of Small and Medium Enterprises (SMEs) in Nigeria is undergoing a fundamental shift.This transformation is underlined by a seemingly torrential outpouring of monies designated for the funding of new business ventures. A casual listing of some of the funding sources will suffice.
1. Early this year, Finance Minister Kemi Adeosun said: “By January 2018, the total amount disbursed to beneficiaries of the third edition of YouWin programme will be N11, 121,031,260, of which the current administration has disbursed N8, 522,545,038.”
The amount was disbursed to 1,500 beneficiaries under the Federal government funded YouWin programme which aims to support young entrepreneurs as they plan, start and grow their businesses.
2. The Bank of Industry (BoI)-sponsored Graduate Entrepreneurship Fund (GEF) has committed N2 billion to provide funding and capacity building to members of the National Youth Service Corps interests in entrepreneurial pursuits. The only requirements for access is the completion of a capacity building programme and the submission of a bankable business plan.
3. The BOI also promotes the Youth Entrepreneurship Support Programme (YES-P) which provides funding to aspiring entrepreneurs aged 18-35, with a minimum educational qualification of Ordinary National Diploma. This N10 billion fund, in addition to developing applicants’ entrepreneurial skills, grants access to N5 million in start-up capital.
4. The Dangote Foundation/BOI Fund is a N5 billion matching fund which could be accessed by enterprises and limited liability companies engaged in manufacturing, agro-processing and merchandising sectors for locally made goods. It offers a maximum of N50 million to individual applicants at a concessionary interest rate of five percent per year.
5. The Development Bank of Nigeria, a Federal Government initiative, aims to lend N5 billion in long-term money to not fewer than 20,000 Micro, Small and Medium Enterprises (MSME) in the country. It will provide finance, partial credit guarantees and technical assistance to eligible financial institutions, including micro finance banks, for onward lending to micro, small and medium businesses.
6. Just last week, the Tony Elumelu-led United Bank for Africa (UBA) and China Development Bank (CDB) announced the signing of a $100 million seven-year loan agreement to finance the development of Small and Medium enterprises in Africa. The loan is expected to improve UBA’s capacity to finance SMEs across the 19 African countries where the bank operates.
The above-mentioned funding sources, albeit not exhaustive, represent a snapshot of the emerging local support for Nigerian entrepreneurs, particularly the Small Business Owners. However, in spite of these initiatives, the growing refrain in the small business community points to a chronic scarcity of venture money.
This raises a number of questions:
1. With all these monies literally flying around, how come Small Business Owners are still complaining about not having access to funds to start and /or grow their businesses?
2. How do we identify and track the recipients of these funds and, by extension, measure the impact of these capital injections, presuming the funds are being disbursed in the first place and to the right beneficiaries?
3. Could this be a twist of the Ancient Mariner where, like his proverbial thirst for water in the ocean, it’s money, money everywhere, as the Small Business Owner hears of monies waiting for him or her, here, there and everywhere, yet the search for investible funds remains fruitless.
Truly, some points to ponder!
The Small Business Activist