With a funding gap of about N617 billion for small businesses in the country, the Lagos Chamber of Commerce and Industry (LCCI) has reiterated the need for development finance institutions (DFIs) and other stakeholders to reduce access barriers against businesses in the country.
While small businesses have their shortcomings, the chamber noted that the majority of Nigerian SMEs have not significantly benefited from available financing opportunities in the country.
Recently, the Organised Private Sector (OPS) raised concerns about the inability of manufacturers and businesses to access various interventions amounting to N1 trillion from the Central Bank of Nigeria (CBN).
LCCI President, Mrs Toki Mabogunje, while speaking at a webinar themed, ‘Funding opportunities for businesses with the Bank of Industry, said that lack of information (on the part of businesses) about the funding schemes offered by different institutions, inability to meet the requirements for funding, contravening application guidelines, submission of wrong or outdated documents (such as tax certificate, financial reports, CAC registration certificate), poor record-keeping and poor credit history, that is failure to service the previous facility prevents business owners from accessing another, are major factors inhibiting many businesses from accessing loans from financial institutions.
She urged businesses to take advantage of opportunities available to them through the interventions by the chamber. Deputy Head, Business Development, Bank of Industry (BoI), Mrs Aderonke Akinluyi, reiterated the bank’s role in supporting industrialisation, import substitution and poverty alleviation.
According to her, we always ensure that we provide relatively lower interest rates than that of the commercial banks so that businesses can access the funding that helps development and societal impact.
“Our business model reflects our goal to drive development through financial and advisory support to all customer levels, with dedicated teams for MSMEs, youth and women-led enterprises. We serve all the enterprises through the state offices”, she said.
She added that between 2015 and 2020, N969.6bn was disbursed to over three million enterprises, noting that to bridge the gaps in many business plans presented to the bank, consultants in the form of Business Development Service Providers (BDSPs) were appointed by the bank to assist businesses in accessing loans.
On his part, the Divisional Head, SME South, BoI, Obaro Osah, debunked some of the perceptions that businesses have about accessing the DFI’s loans.
According to him, there is a thin line between perception and reality, hence the need to correct such perceptions. He stated that businesses do not need to know anyone in the bank to access funding as standardised procedures and platforms have been created to address the gap.
“You do not have to pay anybody as the funds are designed to help the country, adding that loan application processing will not take a year as regular meetings are held to address requests, with the shortest response time being one month. BoI does not only support manufacturing industries but also other micro-enterprises and start-ups as well”, he added.
Osah also listed some of the requirements that aid loan application approvals, urging businesses to follow the due process for ease of assessment and equally embrace full disclosure.
According to him, the bank also eased the collateral requirements, having realised that most of the loan requirements are below N10 million to increase access to its funds, adding that interest rates have equally been reduced due to the pandemic to help businesses thrive.
