Access to finance remains one of the biggest threats to MSME – CBN

The Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has stated that access to finance remains one of the biggest threats to MSME development in both developed and developing economies.

This was disclosed by Mr Osita Nwanisobi, Director, Corporate Communications, who represented the CBN Governor at a keynote address at the 30th-anniversary conference and awards of the Finance Correspondents Association of Nigeria (FICAN) themed, “Financing Infrastructure & SMEs for inclusive growth in the post-COVID-19 economy.”

Despite being a major driver of growth, innovation, and job creation, he explained, the ability of micro, small, and medium enterprises (MSMEs) to spur growth and create jobs has been hampered by a lack of access to quality infrastructure.

What the CBN said

The CBN Governor in his statement delivered by Nwanisobi said, “Beyond infrastructure, access to finance remains one of the biggest threats to MSME development in both developed and developing economies alike, with serious implications for productivity, economic development, and job creation.” 

Mr Emefiele asserted, “The financing gap for MSMEs in Nigeria is estimated to be about N617.3 billion annually pre-Covid-19 pandemic, as less than 5 percent of these businesses have access to adequate finance to support their working capital and business expansion needs (PwC). Other constraints to MSME development in Nigeria, as noted in the survey, included difficulty in finding customers, infrastructure deficit, insufficient cash flows, multiple taxations, regulatory burden, and sub-optimal implementation of the provisions of the MSME policy.”

He revealed that the apex bank has put in place several policy measures to stimulate economic growth and reduce the impact of the COVID-19 pandemic on Nigerians. He reiterated that the CBN has remained committed to fulfilling its developmental mandate by collaborating with stakeholders across infrastructure and MSME segments in order to boost domestic output.

“There is an urgent need for fiscal authorities to collaborate with the Central Bank of Nigeria to change the lenses through which they look at MSMEs and infrastructure development, by developing innovative policy measures to unlock the potential of these enterprises to drive innovation and industrialisation. Distinguished ladies and gentlemen, without adequate infrastructure, the Nigerian economy cannot overcome its structural challenges and achieve growth, as well as development,” the CBN Governor added.

Credit: Vanguard