SMEDAN to establish micro-finance bank for SMEs
The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) says it would soon establish a micro- finance bank to enable operators of Micro, Small and Medium Enterprises (MSMEs) to have unfettered access to funding to run their businesses.
Dr. Dikko Umaru Radda, Director General/Chief Executive Officer of SMEDAN, stated this in Abuja at an interactive session with the Commerce and Industry Correspondents Association of Nigeria (CICAN).
Radda explains that the idea for the establishment of a micro–finance bank was conceived due to the plethora of challenges confronting SMEs operators in Nigeria before they could access funding for their businesses.
He says the high interest rate charged by commercial banks to the operators of SMEs is a major problem as it stifles the growth of the sector.
Radda said commercial and development banks charge interest rate as high as over 20 percent, adding that no SMEs operator will be able to break even and repay loans with this double interest rate.
He also fingers other stringent conditions provided by commercial banks, which have constituted themselves as obstacles before SMEs operators.
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