MSMEs financing: BOI deepens relationship with BDSPs

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In a bid to deepen financing of Micro, Small and Medium Enterprises, MSMEs, in Nigeria, the Bank of Industry, BoI said it has set up mechanism to improve relationship with its over 200 Business Development Support Providers, BDSPs across the country.

Managing Director of BoI, Mr. Kayode Pitan, said at an interactive session with stakeholders on the operation of the BDSP scheme, that the country’s private sector was not as developed as it ought to be, thus necessitating the need to deepen its entrepreneurship space.

Represented by Mr. Waheed Olagunju, the bank’s Executive Director in charge of Small and Medium Enterprise (SME), Pitan recalled that the BDSP scheme was created in 2014 to enhance access to finance, entrepreneurial development, as well as assist MSMEs develop bankable business plan to facilitate finance and improve their record keeping. According to him, BDSPs are also expected to support MSMEs develop synergies and sustainable relationships with large enterprises, industrial buyers and suppliers along the value chain.

Pitan stated: “We plan to grow our risk asset to N1.29 trillion by Dec. 2019. Presently, our risk asset is in the region of N600 billion and we hope we can double this figure in the next 18 months. We cannot do this on our own, given the size of this country and numbers of entrepreneurs that we intend to reach. We are trying to increase the contribution of MSMEs from less than 10 per cent of our risk assets to at least 30 per cent by 2019.

“We are looking at about N376 billion and we are looking to disburse this amount to about 10,000 entrepreneurs across the country. Given the size of Nigeria, BoI as a Development Finance Institution, DFI, cannot engage more than 10,000 entrepreneurs effectively and efficiently, that is why we are working with partners, collaborating with Enterprise Development Centres, EDCs, and BDSPs across the country.”

The BoI boss noted that there was the need to collaborate and leverage on the expertise of the BDSPs to evaluate and access the character, competency and viability of the 10,000 enterprises across the country. He urged the BDSP operators to attract quality customers with viable business plans that would effectively utilise the loans in order to achieve an inclusive and sustainable economic growth and development in the country.

“To achieve this inclusive growth, we need to intervene more in the MSMEs space because that is where the developmental impact and multiplier effects of investment is much higher,” he added.

Pitan said the bank was taking steps to review the BDSP scheme and would continue to engage the operators on the modalities that would serve the interest and growth of MSMEs in the country.

Also speaking, Mr Simon Aranonu, Executive Director, Large Enterprises, BoI, said the collaboration between the bank and BDSP operators was critical to catalyse growth of MSMEs in the country, adding however that MSMEs requires more than capital to grow.

He said: “We are relying on you (BDSPs) to assist the MSMEs get structure, improve their capacity, inculcate in them sound corporate governance and enlighten them on global best practices.”

“Our dream is to help enterprises transcend from small to medium and then large enterprises, that is the way to achieve sustainable business growth. The large enterprises cannot survive without the MSMEs, which is why we have to ensure there is sufficient cross breeding between them.”




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