The Nigerian Institute of Social and Economic Research (NISER) has called for timely release of funds to boost operations of micro, small and medium scale enterprises (MSMEs), in order to reduce the effects of recession.
NISER also suggested the removal of all obstacles to loans through advocacy and sensitisation.
According to The Guardian, while Dr. Babatunde Ekundayo of the Surveillance and Forecasting Department of NISER was delivering the monthly lecture of the institute, he pointed out that “the role of MSMEs in economic and social development is not in dispute. Therefore, government should always ensure that all funds released to boost the operations of the MSMEs get to them timely and as designed through effective monitoring of all implementation processes.”
The Guardian reports that, in a paper entitled, “Impact of Micro Finance Banks on Micro, Small and Medium Scale Enterprises in Nigeria,” Ekundayo, who described micro-finance banks (MFBs) as financial institutions that specialise in banking services for low-income groups or individuals, lamented that proportion of the MSMEs reached by MFBs was infinitesimal.
He said: “However, the proportion of the MSMEs reached by MFBs is smaller relative to the total number of MSMEs operators in Nigeria. Besides access to credit, a number of problems are facing the operations of MSMEs in Nigeria.”
To address the problem, he called for a proactive strategy, adding that there should be human and institutional capacity building for the operators, urgent renewal and upgrading of MSMEs’ infrastructure in existing industrial development centres through cluster development approach.
“Government should provide public goods that level the playing field for financial institutions to innovate financial services for improving access to finance in all segments of the market.
“Accordingly, there should be systematic introduction of poverty-lending approach into macro financing options in Nigeria to jump-start the growth of MSMEs as well as to fast-rack the diversification process.”
Ekundayo urged government to remedy market failures and assist potential start-ups and disadvantaged groups.
Source: The Guardian