Improving the Lot of Small Enterprises
Monday, April 18, 2011
To address the problems facing small enterprises, especially the micro small and medium enterprises (MSMEs), the Nigeria MSME Project, a pilot initiative of the Federal Government and the World Bank in Abia, Kaduna and Lagos states, have come to the rescue.
The trouble with small enterprises will always attract discussions. If you ask the small business owner what the trouble is, he will tell you it is funding. But he is wrong. True, funding is a problem, but it is not all the problem. Other problems abound, and these include capacity, business-friendly environment or business climate barriers, etc.
Available data tells of a Nigeria that is thirsty of micro-funding. Over 80 million Nigerians, 65 percent of the active population, remains unserved by the formal financial institutions. Thus microfinance specific institutions in Nigeria have not been able to adequately address the gap in terms of credit, savings and other financial services required by the micro entrepreneurs. Moreover, we all know that there is weak institutional and managerial capacity of existing microfinance institutions, and weak capital base of microfinance institutions.
From 1970 to date, the Federal Government has been addressing the issue of poverty in Nigeria through the establishment of lending institutions and a number of poverty alleviation institutions. We have had the likes of Rural Banking Programme, National Poverty Eradication Programme (NAPEP), Family Economic Advancement Programme (FEAP), Nigerian Agricultural Insurance Corporation, agric banks that have come up under various names, and the latest is a long list of Microfinance Finance Institutions (MFIs), etc.
To address the problems facing small enterprises, therefore, the Nigeria MSME Project, a pilot initiative of the Federal Government and the World Bank in Abia, Kaduna and Lagos states, have come to the rescue.
The Project aims to increase the performance and employment levels of MSMEs in selected non-oil industry sub-sectors and in the three targeted states of the country listed above.