SMEDAN: Taking entrepreneurship funding to new heights

Great economies thrive on the strength and capabilities of their Small and Medium Enterprises (SMEs).

Likewise, development patterns across the globe show the roles played by SMEs in resource mobilisation and the emergence of an industrial economy.

In Asia, Europe and North America, SMEs play significant functions in the growth, development and industrialisation of their economies as they have been nurtured to achieve that objective.

However, Nigeria remains an exception as SMEs have largely performed below expectation as a result of poor access to finance, inadequate managerial skills, poor accounting practice, poor infrastructure, policy somersault, multiple taxes, environmental factors, and marketing problems, among others.

The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) under its current Director-General Dikko Radda has recognised the need to boost SMEs operations by putting in place strong measures that confront these challenges facing the sector. From the implementation of the One Local Government, One Product (OLOP) Program, National Enterprise Development Program (NEDEP), establishment of the SME Rating Agency of Nigeria, credit information portal, ICT development to implementation of the Nationwide MSMEs Clinic to mention but a few, SMEDAN is helping the Federal Government to realize its vision of improving the economy and lives of the citizenry through skilled entrepreneurship and access to finance.

The One Local Government, One Product (OLOP) program remains an important input into the development agenda of the present administration. The program was meant to identify and facilitate specialization of unique product or service peculiar to each of the 774 local government areas in the country.

According to Radda, the pilot scheme and its subsequent stages have been a huge success.

He explained that under this programme, the agency commenced five pilot schemes in Katsina State for kilishi producers; Anambra State for palm kernel oil producers; Kaduna State for honey producers, Federal Capital Territory (FCT) for cassava producers and Osun State for sweet potato producers. Each of these artisans were provided with locally fabricated equipment to mechanize processing.

Also, workplaces were provided in collaboration with stakeholders to promote hygiene. The overall idea is to make their products more competitive in the market through improved hygiene and better packaging.

Continuing, he explained that in all the locations, organic clusters involved in producing the identified products are being empowered to increase their level of operations in the areas of capacity building, access to equipment, access to working capital and access to workplace.

In 2017, SMEDAN began the second phase of the project which covered the 109 senatorial districts in the country and expected to generate over 4,900 new jobs at the end of it.

Continuing, he said the OLOP program dovetailed into the National Enterprise Development Program (NEDEP), a brainchild of the Federal Ministry of Industry, Trade and Investment anchored by the trio of SMEDAN, Bank of Industry and Industrial Training Fund to address challenges in access to finance and market and enterprenuership skill deficit.

‘ It was designed to generate one million jobs annually. Under the NEDEP, the agency delivered entrepreneurship training to more than 39,000 youths across the country in partnership with the industrial Training Fund (ITF) in what is called ‘The National Industrial Skills Development Programme (NISDP),’ Radda said.

Another challenge, he listed, is poor access to finance. One of the issues confronting access to finance by MSMEs is the absence of acceptable credit rating platform, especially given the fact that most of the businesses remain informal. In response to this challenge, a Rating Agency was formed known as The Small and Medium Enterprises Rating Agency of Nigeria (SMERAN).

Managing Director, Rockview Enterprises Limited, Abiodun Lawrence, said the scheme is a launching-pad for MSMEs into the world of financing. He said the Rating Agency is expected to de-risk the MSMEs and ensure that they have a seamless access to affordable finance with respect to credit and credibility. ‘This will ensure that they are effectively positioned to contribute to job creation, wealth creation and poverty alleviation in the country,’ Lawrencesaid.

He explained that SMERAN is a product of collaboration between SMEDAN, Bank of Industry (BOI) and the Nigeria Export – Import Bank (NEXIM). The institutions are working with Dun and Bradstreet, the world’s leading source of commercial information, ratings and insight on businesses for over 150 years, to actualize this project.

This article provided by NewsEdge.