The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), in
collaboration with Dun and Bradstreet, a world leading source of commercial
information and insight on businesses, is planning to establish a National
Micro, Small and Medium Enterprises (MSMEs) Rating Database to provide a common
standard for evaluating, categorizing and monitoring the performance of SMEs in
the country.
The proposed rating database is to serve as a catalyst for SME growth, access to
finance and job creation in Nigeria, with a view of assisting financial
institutions with a standard and reliable mechanism to support due diligence
procedures for MSME lending.
Speaking at a Stakeholders Forum and Executive briefing at the SMEDAN
Headquarters in Abuja, the Director-General of SMEDAN, Alhaji Muhammad Nadada
Umar said that the Agency aims to promote free information flow between the
commercial and development banks and other specialized funding agencies in
providing credit to MSMEs through the scheme.
‘’The rating database’’ he said, ‘’will institute a reliable process and
benchmark to assess and rate Nigerian MSMEs based on standardized criteria and
policies thereby providing reliable database for funding decisions by financial
institutions. With this service, MSMEs that are duly registered and rated in the
database will have easier access to funding’’.
Alhaji Umar added that already, SMEDAN, in partnership with the National Bureau
of Statistics is putting mechanisms in place to formalize SMEs in the informal
sector with a view of facilitating their access to loans with the lowest
interest rates, urging the Central Bank of Nigeria to assist the efforts in this
regard.
While commending the apex bank for earmarking 200 billion Naira for the SME
Credit Guarantee Scheme, he urged it to do more to save the sector from heavy
reliance on imported technologies just as he recommended that the federal
government inject looted funds which it has recovered into the development of
MSMEs in the country.
The rating database, which has been successfully established by Dun and
Bradstreet in related economies like India, Bangladesh and the United Arab
Emirates, will assist the growth of ‘strong’ MSMEs that maintain impeccable
track business performances over time and will also serve as a foundation for
continuous monitoring of MSMEs in the country.
Furthermore, the scheme is expected to create the conducive environment needed
for MSMEs, especially the ‘weak’ ones, to develop, reduce transaction time and
cost for commercial banks to assess MSMEs for credit facilities, and encourage
financial support from international donor agencies and improve trade
opportunities.
In his detailed presentation of the scheme, Mr. Richard C. Opara of Dun and
Bradstreet Nigeria, emphasized that for it to succeed, the proposed rating
database must be centralized for easy access, it must be nationally accepted and
consistently applied, adding that the scheme on a larger scale, would promote
nation-building whereby bright ideas from developers who might not have the
necessary funds would be presented with the opportunity to translate their ideas
into reality and sustain them over the years.
‘’SMEs have come to be recognized as the primary drivers for job creation in the
economy as they make up about 80 percent of the population. With such a huge
percentage of the population in the informal sector, the main barriers to their
growth among other challenges remain accessible finance and lack of
infrastructure.
‘’ These challenges have persisted because financial lenders have too many
requests from people who have the zeal to establish businesses, but who do not
have upfront collateral to secure the loans needed to finance such ventures. No
bank wants to deal with a ‘weak’ company whose information is insufficient or
untraceable, hence, the significance of the database’’.
He proposed for the establishment of a Stakeholders Coordination Committee
which would oversee the planning and execution of the scheme while expressing
confidence that with SMEDAN and other relevant stakeholders, the informal sector
can be driven to move the economy forward.
The Forum was attended by representatives from the Central Bank of Nigeria
(CBN), Bank of Industry (BOI), Unity Bank, Ecobank, Nigerian Export and Import
Bank (NEXIM), Bank of Agriculture, Federal Ministry of Commerce and Industry,
First Mutual Microfinance Bank, National Boundary Commission and SMEDAN.
Signed,
Levi Anyikwa
Assistant Director (Corporate Affairs)
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