In an effort to proffer solutions to the current economic recession biting hard on all segments in the country, the Nigerian Institute of Social and Economic Research (NISER), Ibadan has recommended timely release of funds aimed at boosting the operations of the Micro, Small and Medium Scale Enterprises in Nigeria (MSMEs).
The research institute also suggested the collapse of all barriers and obstacles to loan information through advocacy and sensitization by appropriate agencies.
Dr. Babatunde Ekundayo of the Surveillance and Forecasting Department of NISER, while delivering the monthly lecture of the institute stated that, “the role of MSMEs in economic and social development is not in dispute”, therefore, “the government should always ensure that all funds released to boost the operations of the MSMEs get to them on time, and as designed through effective monitoring of all implementation processes.
In his paper titled, ‘Impact of Micro Finance Banks on Micro, Small and Medium Scale Enterprises in Nigeria’, Ekundayo described Micro finance banks as financial institutions that specialize in banking services for low income groups or individuals. He lamented that the proportion of the MSMEs reached by MFBs is smaller, relative to the total number of MSMEs operators in the country.
“However, the proportion of the MSMEs reach by MFBs is smaller relative to the total number of MSMEs operators in Nigeria…aside, access to credit, a number of problems are facing the operation of MSMEs in Nigeria.”
He then recommended thus, “there is urgent need to take proactive strategy to address the constrains faced by MSMEs. There should be human and institutional capacity building for the MSMEs operators, urgent need for renewal and upgrading of
MSMEs infrastructure located in the existing industrial development centers through cluster development approach.
“Government should provide public goods that level the playing field for financial institutions to innovate financial services for improving access to finance in all segments of the market.
Accordingly, there should be “systematic introduction of poverty lending approach into macro financing options in Nigeria, to jump start the growth of MSMEs in Nigeria, to fast-rack diversification process.
“Government intervention to correct market failures, assist potential start-ups and disadvantaged group in society is imperative”, he said.
He also suggested “further reduction in interest rate for MSMEs sector.