MSMEs stakeholders seek partnership for new Trust Fund as govt interventions fail

The Micro, Small and Medium Enterprises (MSMEs) stakeholders have appealed to the Central Bank of Nigeria (CBN) to as a matter of urgency explore their newly set-up MSME Development Trust Fund and invest a fraction (about N50 billion) of the N220 billion MSME Development Fund which has remained inaccessible due to stringent guidelines..

The stakeholders are also asking the banking regulator to explore the self-regulation platform that the Trust Fund provides for the MSME sector and leverage on its capacity to help drive financial inclusion and literacy in the country.

The call was made on Tuesday in Abuja during a press briefing addressed by some executives of the trust fund, including AFRIDECO executive director, Abdalla Yakub and Valentine Whensu, president, National Association of Microfinance Banks, among others.

Speaking on behalf of the stakeholders, Yakubu said the trust fund would ensure that the grassroots benefited maximally from MSME intervention funds as he also urged development entrepreneurs to partner with them by providing seed funds for rural development and financial inclusion.

The MSME stakeholders had taken to establishing the trust fund following obvious failure of several government interventions to help them solve the single most critical constraint to their survival, which is poor access to finance.

The trust fund has a combined membership of more than 60 million nationwide and will serve as the fund manager and also an investment platform for MSMEs Stakeholders Commonwealth including the All Farmers Association of Nigeria, Cooperative Federation of Nigeria, Nigerian Association of Small Scale Industrialists and National Association of Micro Finance Banks,

Nigeria Association of Small Scale Industrialists (NASSI), National Association of Small scale and Medium Enterprises (NASME) and National Association of Nigerian Students.

At the press event, Yakubu noted that the fund will operate through three implementing agencies already registered and owned by stakeholders.

One of the agencies is the MSME MFB Ltd, which he said is a wholesale lending platform for all the stakeholders for easy access to finance and will offer members flexible underwriting, the best financing and wider range of quality loans. The bank, according to him, will also take the risk of the N220 billion from the CBN, which is one of the factors inhibiting the easy access of fund by the MSMEs.

The MSME Development Finance Institution is another agency and will try to address the skill gap that permeates MSME sector while the third, MyCard Cash Passport, is a one-stop e-payment mobile money and financial inclusion card for 65 million members that make up the commonwealth.

Yakubu also called on the World Bank, the Africa Development Bank and other financial development institutions to take advantage of the trust fund platform for the $500 million earmarked for MSMEs in the country.

He also urged the Bank of Industry to key into the scheme as he appealed to business development service providers to help the MSMEs package their business plans and proposals in a manner that make them bankable.

Yakubu said that with the combined strength of over 60 million, the MSME commonwealth is strategically positioned to drive the sector and transform it into the leading revenue earner for the country especially in the face of dwindling oil prices.

Yakubu raised the concerns that the micro and small enterprises operate in an extremely challenging environment and face serious problems in various areas, admitting that the government has taken several initiatives, the latest being N220 billion MSME Development Fund.

“The N220 billion fund is intended to provide access to finance for small businesses but accessing this fund has been quite a difficult task for those that is intended for due to stringent conditions attached,” Yakubu worried.

He said that these challenges informed their forming a commonwealth of MSMEs stakeholders in order to try to work out ways of addressing the problems bedeviling the sector.

He said that the commonwealth intends to face challenges and take advantage of opportunities created and that such a forum helps in garnering and shaping public opinion, building consensus, crystalising policy inputs and giving feedback on policy initiatives.