Heritage Bank seeks strategy for building SMEs

Date:

Ifie-SekiboThe Managing Director/Chief Executive Officer of Heritage Bank, Mr. Ifie Sekibo has called for concerted promotion and protection of small and medium enterprises through the establishment of a solid framework supported by clearly articulated government policy.

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A statement made available to our correspondent on Friday said the establishment of a solid framework was the first step in creating an active SME sector that could spearhead the much needed revolution Nigeria and indeed Africa urgently required in the area of building the next generation of African corporates.

Sekibo, who was a guest speaker at the second US-Africa Trade and Investment forum in Newyork, said SMEs were more credit-constrained in sub-Saharan Africa.

He, however, noted that the situation typically affected growth possibilities as significantly low number of start ups who applied for financing actually succeeded.

He said, “Studies indicate that more than 70 per cent of the SMEs lack access to medium-longer-term finance, creating an SME funding gap of more than $140bn in Africa alone.

“Using Nigeria as a case study, between 2003 and 2009, SME loans as a percentage of total credit, decreased from 7.45 per cent to 0.18 per cent. Yet by 2012, Nigeria had about 17.6 million MSMEs employing about 32.4 million people.”

Sekibo added that  it was generally accepted that SMEs enhanced competition and entrepreneurship, and their development had a positive impact on innovation and productivity growth, policy and infrastructure factors to mitigate risk and costs that SME sector could not internalise needs to be seriously worked upon by all relevant stakeholders.

He further revealed that in Nigeria, most SMEs die within the first five years of existence while another smaller percentage goes into extinction between the sixth and tenth year, with only five to ten per cent surviving, thriving and growing into established corporate status.

He listed the leading cause of such sub-optimal output to include – poor access to funds, weak institutional support, unstable macro economics, complicated and unstructured legal framework/regulation, inadequate business information, infrastructure and business environment and human capital factors, among others.

 

Source:Punch Nigeria

Babatunde Akinsola
Babatunde Akinsolahttps://naija247news.com
Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

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