Edo State Government on Thursday said that the Central of Bank of Nigeria (CBN)’s monetary policy of high interest rates to commercial banks was reason why Small and Medium Enterprises (SMEs) are not growing.
The State Commissioner for Wealth Creation, Cooperatives and Employment, Emmanuel Usoh, made this remark at the 17th Micro, Small and Medium Enterprises (MSMEs) International Summit and Exhibition organized by the Nigerian Association of Small and Medium Enterprises (NASME) in Benin-City.
Usoh noted that the apex bank’s monetary policy still pegs interest rates to commercial banks at between 20 and 25 per cent, which he said has made it difficult for SMEs to have access to loan from the commercial banks.
He also noted that the commercial banks interest rates are laced with cumbersome collateral facilities which has not helped the growth of small businesses in the country.
“The monetary policy of Central Bank of Nigeria is not cascading down to commercial banks where interest rates still ranging between 20 percent and 25 percent for commercial banks,” he said.
Usoh listed other challenges inhibiting the growth of SMEs in the country to include corruption, huge infrastructure deficits, lack of capacity building for small business owner, institutional and public reforms.
The Commissioner noted that the enabling environment would be created for small businesses to thrive in the country, only through adequate institutional and infrastructural reforms.
President of NASME, Degun Agboade, in his speech, said the summit was geared towards focusing on critical policy issues that is expected to crystallize into the much awaited economic diversification agenda of the federal government of Nigeria.
He said the summit was the association’s modest contribution to the economic reforms being presently pursued by the federal government.
Agboade added that the federal government economic agenda was to resuscitate the manufacturing sector of the economy by refocusing on areas of comparative advantage in agriculture and mineral resources to sustain real growth and development of the economy.
In his remark, the Managing Director of Nigeria Social Insurance Trust Fund (NSITF), Adebayo Somefun, who was represented by the General Manager Stephen Bathana, noted that SMEs is a key driving force in the nation’s economy.
Somefun disclosed that as part of its mandate of creating an enabling environment for small businesses to thrive added that workers of over 22,000 establishment have been paid compensation since its establishments.