- CBN Intervenes On MSMEs N48tr Funding Gap
Financial intervention is underway for 17.5 million Micro, Small and Medium Enterprises (MSMEs) operating in Nigeria, as the Central Bank of Nigeria (CBN) and the National Judicial Institute (NJI) have teamed up to dismantle their financial bottlenecks.
The numerous interventions notwithstanding, the CBN in collaboration with the NJI on Monday organised the first national workshop for judicial officers on Secured Transactions in Movable Assetss Act (STMA) and National Collateral Registry (NCR) themed: “Leveraging Movable Assets for Credit Delivery in Nigeria; Legal Regulatory Framework. This was done to acquaint them with the workings of collateral registry.
The CBN Governor, Godwin Emefiele, speaking at the event said the more than 17.5 million MSMEs in Nigeria, remain the catalyst of Nigeria’s economic growth, but are faced with the most commonly cited challenge of financial bottlenecks.
“Support for MSMEs’ financing is more critical now than ever given the need to boost Nigeria’s long-term growth trajectory since exiting recession in the second quarter of 2017.
“In real terms, our GDP grew by 1.8 per cent in the third quarter of 2018 compared with 1.2 per cent in the corresponding period of 2017. The observed growth was largely driven by continued improvements in non-oil sector activities such as agriculture, information technology, manufacturing, transportation and storage, trade and other services.
“About 96 per cent of enterprises operating within these sectors are MSMEs. These enterprises account for an estimated 48 per cent of Nigeria’s nominal GDP, seven per cent of export and about 84 per cent of workforce.
“Despite these contributions, however, MSMEs across the country continue to face structural drawbacks particularly due to their peculiar nature. Poor access to finance, high cost of borrowing, inadequate infrastructure, non-conducive business environment and weak capacity are some of the stylised challenges constraining their growth.” the apex bank Governor said.
The CBN put the existing financing gap in the MSMEs segment of the economy at $158 billion (N48 trillion).
Emefiele further said the N48 trillion financial gap was a reflection of the risk-driven apathy of financial institutions to lend to the MSMEs, adding that the statistics bring to view the urgent need for stakeholders to synergies, support and promote MSMEs through improved access to affordable finance.
