FG asks new BoI board to review 15% MSMEs loanable fund

The Federal Government has charged the newly inaugurated board of Bank of Industry (BoI) to review upwards the current arrangement where less than 15 percent of loanable funds are being set aside for Micro, Small and Medium Enterprises (MSMEs), which it described as unacceptable.

Olusegun Aganga, the minister of industry, trade and investment, gave the directive on Tuesday at the inauguration of the board members of BoI as
he charged them to dwell on the bank’s core mandate which is to provide financial assistance that would drive businesses of large, medium and small projects in addition to diversification and modernisation of existing businesses.

According to Aganga, “The constituted board and inauguration of the board is part of the on-going reforms of the Federal Government to reposition the Ministry of Industry, Trade and Investment as a major driver of the transformation agenda of the present administration.”

He said, “The future of MSMEs rests on how you respond to their funding needs. The MSME sector, according to 2010 survey, has 17.5 million SMEs and employs 32 million people. In the recent re-based process, the sector accounted for the 45 percent of the GDP.”

The minister further directed the newly constituted board to drive inclusive and sustainable growth, adding that the MSMEs sectorhas to receive priority attention from the bank.

Aganga also suggested to the board members to borrow a leaf from the practice in China and Indonesia where significant portion of loanable funds without collateral is extended to small scale and medium enterprises with close to 97 percent repayment rate despite the fact that there is no collateral to the funding.

Aganga also urged them to provide the business support services needed to drive the MSMEs to compete globally.

HARRISON EDEH, Abuja