MSMEs can use assets as collateral to get bank loan-Minister
.Says FG earmarks 30% of the budget for capital expenditure
By Udeme Clement & Joel ThankGod
The Minister of Information and Culture, Alhaji Lai Mohammed, has said that operators of Micro Small and Medium Enterprises, MSMEs, in Nigeria can use their movable assets like vehicles and equipment as collateral to raise loans from commercial banks to expand their businesses for increased productivity.
The Minister said this in his keynote address at the 2018, ‘Africa Together Conference’ at University of Cambridge in UK.
He explained, “The challenge of access to credit is being frontally addressed, by making it possible for MSMEs to register their movable assets, such as vehicles, equipment and use them as collateral to raise loans. This will remove the need for traditional assets like real estate, offices and factories”.
According to the Minister, “The two most critical impediments against business, decent transport connections and reliable power supply, are also being tackled, by ensuring better roads and train networks. So that goods and services can be moved around more cheaply and efficiently. Therefore, businesses can plan for the future, knowing they will not be hampered by energy outages”.
His assertion, ”For instance, Nigeria earmarks 30percent of its annual national budgets for capital expenditure. That means N2.7 trillion has gone to infrastructure in the last two years, which is unprecedented in our history. Power generation climbed to 7,000MW from just over 2,500MW. Government hopes to add another 2,000MW by end of the year”.
”Also, government has signed a concession agreement with an International Consortium led by General Electric. This will bring new life into the tracks, increasing capacity and speed. Not only will this allow for goods and services to be moved around cost-effectively, it will allow the prosperity of the nation to be more equitably spread through increased connectivity”.
The Minister mentioned investment in human capital, changing the business environment and building national infrastructure as some of the areas government has made impact.
He added, “Skill shortages in labour pool are being addressed through several measures, including the four-pronged N-Power programme that is providing employment and vocational training for graduates. Other areas include access to loans for medium and small enterprises as well as conditional cash transfers to the most vulnerable members of the society”.
”Much of our programme has honed-in on business reform. Nigeria has moved up 24 places on the World Bank ranking on ‘Ease of Doing Business’ index – putting it among the top 10 global reformers, alongside Zambia, Malawi and Djibouti. The two areas we have prioritised are, starting a business and access to credit”.