In a recent report released by the Central Bank of Nigeria (CBN), it has been revealed that over the course of ten years, only a fraction of the total loan disbursed, amounting to N10.39 trillion, has been allocated to Micro, Small, and Medium Enterprises (MSMEs) as intervention programs. Despite their significant contribution to the economy, MSMEs received a mere 6.63% of the total amount, with a detailed breakdown indicating a disbursement of N689 billion between August 2013 and September 2023.
According to the report, this allocation places the MSME sector third in line in terms of intervention program funding, trailing behind the export sector with 2% and the health sector with a meager 1%. The report sheds light on various intervention programs initiated by the CBN, including the Micro, Small and Medium Enterprises Development Fund (MSMEDF), Agri-business/SME Investment Scheme (AgSMEIS), Nigeria Youth Investment Fund (NYIF), and more, with the majority of allocated funds either repaid or in ongoing payment status, indicating positive performance within the sector.
However, financial experts have raised concerns over the limited funding allocated to MSMEs, particularly considering their pivotal role in Nigeria’s economy. Despite contributing significantly to the employment rate, which stands at 88% according to the National Bureau of Statistics (NBS), MSMEs face challenges accessing funding and coping with high-interest rates.
Top beneficiaries of MSME loan programs include initiatives such as the Micro, Small and Medium Enterprises Development Fund (MSMEDF), Agri-business/SME Investment Scheme (AgSMEIS), Targeted Credit Facility (TCF), Creative Industry Financing Initiative (CIFI), and Nigeria Youth Investment Fund (NYIF), which collectively aim to support various sectors and alleviate unemployment, especially among youth.
Experts emphasize the importance of policy reforms to address these challenges and unlock the full potential of MSMEs in driving economic growth. They stress the need for improved access to funding, reduced interest rates, and infrastructure enhancement, particularly in reliable power supply, to create an enabling environment for MSMEs to thrive.
The revelation from the CBN’s report underscores the urgency for concerted efforts from policymakers to implement effective measures that prioritize and support the growth of MSMEs, thereby contributing to sustainable economic development in Nigeria.
Credit: Nairametrics
