…As NPL crashes to 3.8%
By Adewale Sanyaolu
In furtherance of its commitment to the growth of Small Medium Enterprises (SMEs) in the country, the Bank of Industry (Bol) says about N300 billion would have been disbursed to the critical sector of the economy by 2019
Acting Managing Director of Bol, Mr.Waheed Olagunju, stated this at the 20th Annual Public Lecture of the Chartered Institute of Personnel Management of Nigeria with the theme ‘‘SMEs as a Catalyst for Sustained Economic Growth in Nigeria,’’ held in Lagos, last week.
Olagunju,who was the Guest Speaker at the lecture, said the N300 billion intervention for SMEs would cover a three year period (2016 to 2019).
He regretted that the weakness of the SMEs has led to the underperformance of the economy over the last 56 years, a situation he said, the bank was trying to reverse through its intervention in different areas of the economy.
Olagunju said that the aim of the loan was to support the government’s efforts at empowering SMEs in the country.
“As we all know, SMEs are the engine of the economy and we have been working to support the government’s efforts at up scaling their capacity.
To crash the rate of unemployment from the 25 per cent rate to a single digit, the SMEs and manufacturing sector need to be involved.
The only issue we have with SMEs is that they keep saying that BOI does not disburse to them, but the truth is that banks need track record and character to disburse loans to enterprises,’’ he said.
The bol boss explained that the major constraint of SMEs is their inability to package convincing business plans capable of convincing lenders.
On the bank’s loan performance, he said Bol has been able to redouble its efforts to ensure that it has a healthy risk asset by approving more loans to potentially viable enterprises while it has equally been able to collect loans as at when due.
He explained that the bank’s Non –performing Loan (NPL) ratio has been improving with the average for 2015 at 5.8 percent, June 2016 at 3.87 percent and as at September this year, it has further reduced to 3.8 percent.
“The major challenge of SMEs is not loan because asking for a loan at the very beginning of your micro business is not the best way to go. It is better to start from somewhere with assistance from friends and family; from there your track record and character can be monitored even by the business owner himself,’’ he said.