The Central Bank of Nigeria, over ten years, allocated a mere 6.63% of the total N10.39 trillion loan disbursed to various sectors as intervention programmes, to support Micro, Small, and Medium Enterprises.
This follows a report of the apex bank, revealing that a total of N689 billion was allocated to the sector between August 2013 and September 2023, according to nairametrics.
According to the report, the micro, small, and medium-sized enterprises sector is third in terms of the least allocation in the intervention programmes, lagging behind the export sector with a mere 2% and, the health sector, which accounts for less than 1% of the total intervention programmes.
The intervention programmes include the Micro, Small, and Medium-sized Enterprises Development Fund; Agri-business/SME Investment Scheme; Nigeria Youth Investment Fund; and Tertiary Institutions Entrepreneurship Scheme, among others.
The report also indicated that, in line with positive indicators of the sector’s performance, most credit facilities allocated to this sector had either been fully repaid or were currently being paid on time for projects.
Meanwhile, Access to funding remains a major obstacle for MSMEs, even though 88% of Nigerians are self-employed and mostly work in the informal sector, according to NBS data.
The financial burden on micro, small and medium-sized enterprises is exacerbated by high interest rates. The high interest rates make it difficult to pay off the debt, often leading to accumulation and financial instability even when loans are available.
To release the full potential of micro, small, and medium-sized enterprises in Nigeria and drive economic growth, these challenges need to be addressed.
To create an enabling environment for micro, small, and medium-sized enterprises to thrive, policy interventions that improve access to affordable finance, reduce interest rates, or increase infrastructure, in particular energy supply are essential.
