Operators in the Small and Medium scale Enterprises, SMEs, sector can now heave a sigh of relief. They would soon receive a major boost as the Bank of Industry, BOI, partners 10 banks to provide funds to tackle their increasing challenges.
The financial institutions are Access Bank Plc, Diamond Bank Plc, Ecobank Nigeria Limited, Fidelity Bank Plc, First Bank Nigeria Limited, First City Monument Bank Limited, Skye Bank Plc, Stanbic IBTC Bank, Standard Chartered Bank Limited and the United Bank for Africa Plc.
Rasheed Olaoluwa, managing director, BOI, explained that lack of access to fund has been a clog in the wheel of operations of the SMEs inhibiting their growth and their development.
Speaking during the signing of a Memorandum of Understanding, MoU, between the BOI and the banks, Olaoluwa said, “BOI decided on a multi-pronged approach to addressing the problem of poor loan packaging and access to finance. The first approach was the recent accreditation of 122 Business Development Service Providers, BDSPs, located all over the country.”
He added that another strategy was to approach SME-friendly commercial banks to partner with BOI in co-financing the nation’s engine room.
The areas of collaboration would include provision of long-term loans to qualified SMEs by BOI based on its Risk Acceptance Criteria, RAC, provision of working capital to the SMEs by the SME-friendly banks also based on their individual RAC and financing sectors such as agro-processing, solid minerals and metals, light manufacturing, logistics among others.
“The loans to beneficiaries would be in accordance with BOI term loans with a tenor of 3 to 5 years for 6 to 12 months at 9 to 10 per cent interest rate,” Olaoluwa added.
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