Small scale firms get N10b loans from banks
By Bukky Olajide
SMALL scale enterprises across the country in the last one year, have received N10 billion loans from banks to boost their activities.
The flexible funding scheme instituted by the Bankers' Committee to make the small and medium scale enterprises the engines of economic growth and job creation, is sponsored by 53 banks.
The interest-free loan scheme operated under the Small and Medium Industries Equity Investment Scheme (SMIEIS) is funded by the banks through 10 per cent of their profit-after-tax.
At a dinner in honour of the immediate past governor of the Central Bank of Nigeria (CBN), Chief Joseph Sanusi, at the weekend in Lagos, the Managing Director of Zenith Bank Plc, Mr. Jim Ovia, said the loans were disbursed to the beneficiaries as at April this year.
He lauded the banks for having huge SMEs' portfolios.
About 170 small firms, which submitted their projects to the participating banks, are among beneficiaries of the N10 billion facility. They have between two and three years to repay the soft loan.
The SMIEIS initiative, in addition to providing finance, also facilitates capacity-building as banks are expected to identify, develop and package viable industrial projects, in partnership with their enterprising customers.
The farewell dinner which was organised by the Bankers' Committee and the Chartered Institute of Bankers of Nigeria (CIBN) was attended by major players in the economy.
Sanusi, however, appealed to the banks to continue to vote 10 per cent of their profit before tax for funding the scheme because it has the potential of revolutionalising the economy.
He said the proper functioning of the SMEs would serve as a catalyst for the blossoming of the economy.
Sanusi explained that the idea of developing SMEs was got from Indonesia, a country of about twice the size of Nigeria's population (240 million) which has about 40 million small and medium scale enterprises.
His words: "I thought we should replicate the success story of Indonesia where the ratio of the SME projects to the population is 1:6. We also did a base line study which is a catalogue of compendium for small scale industries, an idea also got from Indonesia."
Sanusi, therefore, urged his successor Prof. Charles Soludo to give the issue of SMEs greater commitment and to listen to criticisms, which may arise during his tenure, especially on the small firms' initiative.
The Deputy Governor of Lagos State, Mr. Femi Pedro while extolling the virtues of Sanusi, stated that the erstwhile chief of the country's apex bank introduced several policies which impacted positively on Nigeria's economy.
To him, Sanusi brought optimism to the financial sector when all hope seemed lost by introducing policies and programmes to sanitise the financial system.
Pedro further said that Sanusi's macroeconomic polices added impetus to the restructuring of the economy.
In his address, the President of CIBN, Mr. Samuel Kolawole, also praised Sanusi for bringing innovations to the banking industry, especially in the area of universal banking, which, he said, appeared impossible before he came on board.
His words: "The operators were yearning for it in order to synchronise their operations with the global trend and you made it possible within a short time of your assumption of office.
"This indeed represents a major transformation in the Nigerian financial system. Today, every bank is free to carve a niche for itself in its area of core competence without unnecessary restrictions," he said.
Kolawole also said that the ethics and professionalism sub-committee introduced by the former CBN chief had indeed rekindled public confidence in the banking system.
He said: "The sub-committee has continued to serve as an arbiter between banks and their aggrieved customers. Before the introduction of the sub-committee, aggrieved customers nursed bottled up complaints and aggression against the banking industry, but the emergence of the sub-committee in 2001 has indeed introduced a rest."
The CIBN president also thanked him for embarking on extensive consultation with the operators before any major policy was finalised. "The suggestions of these operators, when integrated into the final policy will always make implementation easy and such policies will indeed produce the desired results," he said.
Ovia, who on behalf of the Bankers' Committee listed the achievements of Sanusi, said that during his tenure, all 21 branches of the CBN were electronically linked up. "In other words, they are on-line, CBN examiners are now very Information Technology savvy," he said.
He also said that the Nigeria Automated Clearing System (NACS) and the settlement banks clearing system were huge successes of the Sanusi era.
Ovia said: "The electronic processing and clearing of cheques have now drastically reduced to three working days for local cheques and five working days for upcountry instruments. This is a feat, when compared to what the situation was some years ago."
On the issue of professionalism, Ovia said that Sanusi encouraged bankers to be true professionals.
He added that "Sanusi advised us to display global best practises. To ensure that banks do not display unprofessional conduct when relating to their customers, Sanusi encouraged the Bankers' Committee to establish a sub-committee on Ethics and Professionalism in December 2000. This body was mandated to develop a Code of Ethics and Professionalism as well as identify practices considered unethical in the industry."
