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NIPC Seeks More Funding for Small Businesses

By on April 4, 2011

The Nigerian Investment Promotion Commission (NIPC) has called on the Federal Government to invest more in the World Bank and Federal Government pilot Micro Small and Medium Enterprises (MSME) project, in order to tackle poverty more effectively.

The Executive Secretary, NIPC, Mustafa Bello, explained that the N50 billion allocated by the Federal Government in this year’s budget for job creation should be used to expand the project. Bello, who spoke during a tour of two of beneficiaries of the initiative, stressed that the World Bank and Federal Government MSME project, which is one of the five World Bank pilot MSME initiatives in Africa, has assisted in creating large, commercially successful microfinance banks.

He added that the project has  helped in the development of a number of commercially oriented and focused business development support services providers in Nigeria.
“The project has built reputation, started developing capacities and we have seen over 100,000 people within the three pilot states who have benefited from the project,” he said. “If we expand this scheme that is currently running in Lagos, Abia and Kaduna to the other 36 states, then we should be taking about 6 million people that will benefit from this initiative, which I think is a welcome development,” he added.

He said microfinance institutions were responsible for the transformation in Bangladesh,  adding that the Asian nation had successfully been able to mobilise their rural development financing. “The MSME pilot project is rather closing at the end of the year, but in our submission of the internal report, we strongly recommend that we must allow the project to close. We are already in talks with the International Finance Corporation (IFC) and IDA to see how we can expand this project to the 36 states,” he said. “Let us invest and focus on enlarging this project because it has succeeded. The major challenge in doing business in the country is access to finance because any time you meet industry operators, they complain about banks being so tough. Imagine if an average Nigerian can access N5 million in a microfinance bank, it would go a long way to transform rural development,” he added.

He stated that the project began in the country with an initial target plan to support two institutions in financial literacy and access to finance but has so far supported five microfinance banks. “This includes ACCION microfinance banks, Susu microfinance Bank, AB microfinance bank, Microcred microfinance bank and the development finance department of Oceanic Bank,” he said.

According to him, the project has also recorded marked improvement in skill development for MSMEs as the engine of economic growth, adding that the project has so far exceeded its initial target of building capacity for 20 business development service providers with the goal of impacting on 1,000 MSMEs directlyand indirectly benefiting from the MSME project.

He stated that the pilot project has remarkably changed the landscape of MSMEs in Nigeria and also observed that government reforms in Nigeria have improved the investment climate substantially and created opportunities for increased
Foreign Direct Investments (FDI) and stimulation of domestic investments thereby creating wealth, building human capacity, creating employment and reducing

source : Thisday