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- 30,000 applications denied
- 700 applications pending
The Managing Director NIRSAL MfB, Abubakar Abdullahi Kure has stated that N38B (Thirty Eight Billion Naira) has so far been disbursed to 81,000 applicants out of the CBN N50B Targeted Credit Facility (TCF) as a stimulus package to support households and MSMEs that are affected by the coronavirus pandemic.
He disclosed this at the recent PwC Nigeria’s SME Webinar with the theme: Managing the Impact of Covid-19 and Repositioning Your Business for Growth.
Speaking as one of the distinguished panellist at the PwC Nigeria’s SME Webinar, Kure also stated that over 700 applications are currently pending while about 30,000 applications were denied due to irregularities in conforming with the requirements.
The virtual event which was moderated by Esiri Agbeyi (Partner & Head Private Wealth Services, PwC Nigeria) had distinguished panellists that comprised of: Tara Durotoye (CEO, House of Tara International), Ada Osakwe (Founder & Chief Executive, Agrolay Ventures and Nuli), Abubakar Abdullahi Kure (MD, NIRSAL MfB) and Mary Iwelumo (Partner, PwC Nigeria).
In her opening remarks, Esiri Agbeyi gave a detailed analysis of the recent PwC’s MSME Survey 2020 report and the implications for sustainability and growth of SMEs in Nigeria. According to her, the report is the first in a series of surveys that aim to provide insights into a range of issues concerning Micro, Small and Medium scale enterprises (MSMEs) in Nigeria and the challenges impacting business growth, particularly financing, taxation issues; and other factors – through the eyes of their CEO’s.
While commenting on the progress made by NIRSAL in the disbursement of the CBN intervention fund, Kure said, “We have made some significant progress. So far we have disbursed 81,000 applicants at the tune of N38B to date. The momentum will continue. Currently, we have over 700 applications on our portal. And that comes to the issue of limited resources, but it’s part of the CBN’s role to ensure monetary and fiscal stability. The loans tenured between 1 and 3 years are subsidized at the rate of 5% for the first year and at 9% for subsequent years”.
He further stated that, “About 30,000 applications have been denied on the grounds of lack of enough business experience, cashflow, invalid BVN, credit check failures and other parameters we have used. Incidentally, we didn’t deny businesses access on grounds of collateral. What we had initially was guaranty and movable assets. So, at that point some SMEs who could not meet the requirements were declined. But now, in order to allow more people to access the loan, some of these conditions have been removed. The simple idea is to allow greater number of SMEs and households access to the facility”.
Presenting the results of the findings, Esiri Agbeyi noted that Obtaining finance (22%), Finding customers (16%) and Infrastructure deficits (15%) were identified by respondents as their most pressing problems.
“One remarkable finding was how payment policies imposed by big corporates severely affected 33% of MSMEs whose payments were delayed for more than a month. This negative impact on cash flows is compounded when you consider the double-digit interest rates or inflation. It does not come as a surprise then when about 50% of the SMEs surveyed did not record growths above 20% over the last 3 years”, said Esiri.
The objective of the study according to Esiri Agbeyi is to capture the challenges the MSME sector faces, identify opportunities to unlock growth and investment, provide solutions, mitigate risks and assess the outlook for MSMEs across industries. Findings covered the Nigerian business environment and market conditions, tax issues, access to finance, growth obstacles, payment policies, the role of technology and the impact of women on the MSME sector in Nigeria.
Commenting on the myriads of challenges facing the SMEs, Ada Osakwe stated that, “There’s a lot of will power that is required. It’s wonderful to bring out policies and solutions, but if we do not have more of the Interswitchs’, if we do not have more of those companies to say these are our champions, this is their path, this is where they were, this is how the environment and the policies that we put in place in Nigeria supported them and this is how they got to this stage and this is where they are today. These are the kind of stories we need to start sharing. Policies and piecemeal interventions here and there will go nowhere. We will just die. That’s the point”.
On her own part, Tara Durotoye stated that there’s a greater need for businesses to identify and re-channel resources and human resource talents leveraging technology innovation.
She further stated that, “My charge to business owners in Nigeria is to make it clear that we don’t have a government that support your business, and that’s our reality. Therefore, we cannot be looking to the government. We have to focus on what we have control over – the strong will to succeed. This is therefore the time to be closer to your customers”.
Corroborating this position, Mary Iwelumo stated that, “A lot of successful businesses from my experience have succeeded not because of what government has done, but because they have been able to fill a void (pain point) of the customer”.
On the activities of PwC in Nigeria, she stated that, “So, in Nigeria we are particularly focused on assisting SME businesses. What we have done, particularly within Covid, we have setup the PwC Cares programme, where we intervene directly with low income earners and with the SMEs we offer advisory services leveraging the following resources: Business plan Toolkit – Articulate strategy and market engagement, My finance partner – Investment and Financial planner and Coaching Lab – Talent pool matching”.
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