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Home Business MSMEs Formalisation: SMEDAN, 6 banks sign MoU on grant scheme

MSMEs Formalisation: SMEDAN, 6 banks sign MoU on grant scheme

by Tom Chiahemen
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The Small and Medium Enterprise Agency of Nigeria (SMEDAN) has signed a Memorandum of Understanding (MoU) with six commercial banks to enhance its Conditional Grant Scheme (CGS).


The six banks are: Heritage, Fidelity, Wema, Access, Jaiz and Sun Trust.


The Scheme is meant to provide training, insurance, N50,000 grants, business formalisation and empowerment to Micro, Small and Medium Enterprises (MSMEs) to compete globally, regionally and nationally.


The Director-General of SMEDAN, Dr Dikko Radda, during the signing on Wednesday in Abuja, noted that the scheme was established to cushion the effect of lack of formalisation of the MSMEs sector in Nigeria.


Radda said the idea of collaboration with commercial banks was to make it easy for the agency to disburse grants to MSMEs which would motivate them and formalise their businesses.


The Director-General, while urging the banks to put more efforts in actualising the MoU, said the scheme had in the past five years impacted on MSMEs growth.

He added that it would continue to improve its operations and challenged the banks to provide more opportunities and easy access to the MSMEs.


The D-G urged them to quickly disburse the grants once posted by the agency to the beneficiaries without delay.
“It is important to disburse the grants as early as possible; we do not want a situation of hoarding the money.


“You are also expected to give appraisal and report on the process of disbursement to rectify any problem.


“We do not want a situation of keeping the money in the commercial banks for a long time. That will create a bad image of SMEDAN and on the part of the banks.

“Banks that do not have branches in all the federation should provide platforms for the grants to get to the beneficiaries on time,” he said.


According to him, 98 per cent of the MSMEs are informal in the sense that they are not registered with Corporate Affairs Commission, do not operate bank account and are in the remote areas without western education.

“Looking at the economic indices, the chance of growth of the MSMEs in the informal sector is very slow.


“So, there is need for them to formalise and have more opportunities to grow into large enterprises,” he added.

He further said that the scheme so far had covered 28 states of the federation and would continue in order to cover all the states by 2022.


In a remark, Mrs Detoun Abbi-Olaniyan, Regional Director, Suntrust bank, expressed appreciation on the MoU, adding that it would continue to be committed in the economic growth of the MSMEs.


She hoped for success stories and economic impacts on the beneficiaries under the scheme. (NAN)

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