- SMEs Battle to Get Bank Loans, Raw Materials
Small business operators have said high cost of raw materials is giving unfair advantage to foreign manufacturers.This is in addition to bank loans being are expensive.
Speaking in Lagos, President, Association of Micro Entrepreneurs of Nigeria (AMEN), Prince Saviour Iche said lack of access to finance is a still a major challenge for smaller and younger companies as small and medium-sized enterprises (SMEs) are unable to invest sufficiently to grow their operations.
Apart from increase in interest rates of loans, he added that most banks are demanding collateral and other requirements.
On raw materials used by small business entreprenuers to make soaps, detergents and personal care products, Iche said the cost has gone up to almost 600 per cent on some of them since January, with the price of some products has gone from N3000 to N23, 000 within seven months.
He added it is becoming challenging for some of them to produce cosmetics because the major raw materials are imported petroleum-based derivatives.
Despite this, he explained that it was difficult for small businesses to increase price to combat margin pressures in response to rise in raw material prices. Availability of raw materials at cheaper cost, he maintained, would boost small manufacturing and increase job creation across the personal care and cosmetic industry.
Calling for the development of the local chemical sector, which is mainly petrochemicals, Iche noted that limited development of the sector was affecting local manufacturing which relies on imported raw materials.
He explained that it was restraining the development of further manufacturing for a wider range of produce involving small businesses.