The Central Bank of Nigeria (CBN) in collaboration with the International Finance Corporation (IFC) are working on modalities for the implementation of movable collaterals for Micro Small and Medium Enterprises (MSMEs) to secure credits from financial institutions from next year.
According to the CBN Director of Development Finance, Paul Eluhaiwe, “If this is done, operators will be able to operate because there would be funds and capacities that would be built to create sustainability in the sector. The entrepreneurs themselves who are supposed to benefit with movable collateral will have access to more financial services.”
Mr. Eluhaiwe, who addressed reporters at the end of the MSME’s financing conference and D-8 workshop in Abuja, added that most banks were not ready to support SMEs with facilities because they feel they do not have the collaterals and banks depend only on fixed collaterals in the country.
He said by next year, the apex bank would start the disbursement of the N220 billion MSME development fund.
“We know that before December, we would have worked out all the issues to make it work for us as a country because we know that it is required for us to move forward,” he said.
Eluhaiwe said the CBN believes that by “building capacity, providing resources, things will work in that sector in addition to the regulatory framework”.