Micro Enterprises Yet To Benefit From N37bn SMIEES Fund  
 11th Sept 2007

By Babajide Komolafe

Six years after the inception of the Small and Medium Enterprises Equity Investment Scheme (SMEEIS), micro enterprises are yet to benefit from the N37 billion set aside by banks under the scheme.

The Small and Medium Enterprises Equity Investment scheme is a voluntary initiative of the Bankers’ Committee approved at its 246th Meeting held on 21st December, 1999. The initiative was in response to the Federal Government’s concerns and policy measures for the promotion of Small and Medium Enterprises (SMEs) as vehicles for rapid industrialization, sustainable economic development, poverty alleviation and employment generation.

The scheme requires all banks in Nigeria to set aside ten (10) per cent of their Profit After Tax (PAT) for equity investment and promotion of small and medium enterprises. The 10 per cent of the  Profit After Tax (PAT) to be set aside annually shall be invested in small and medium enterprises  as the banking industry’s contribution to the Federal Government’s efforts towards stimulating  economic growth, developing local technology and generating employment.

According to the guidelines of the scheme, “the funding to be provided under the scheme shall be in the form of equity investment in eligible enterprises and or loans at single digit interest rate in order to reduce the burden of interest and other financial charges under normal bank lending, as well as provide financial, advisory, technical and managerial support from the banking industry. Every legal business activity is covered under the scheme with the exception of trading/merchandising and financial services.”

The guidelines of the scheme also stipulated that 10 per cent of the funds set aside should be earmarked for lending to micro enterprises. However the sectoral distribution of SMEEIS fund as at July released by the CBN show that banks are yet to comply with this provision of the scheme’s guideline.

The largest chunk of the fund went to the services sector which benefited N9.54 billion or 50.3  per cent of the N18.96 billion disbursed so far from the N37 billion set aside. The N9.54 billion was disbursed to finance 105 projects in the services sector.

The real sector came second in terms of the amount disbursed, benefiting N9.4 billion or 49.7 per cent of the total amount disbursed.

Sub-sectoral analysis of the funds disbursed to the Services sector shows that N1.77 billion was disbursed to finance 22 projects in the Information technology sub-sector, N133.9 million was disbursed to finance four projects in the Educational services subsector, N3.52 billion was disbursed to finance 63 projects in the services sub-sector, and N4.1 billion was disbursed to finance 16 projects in the tourism sub-sector.

source: vanguard

Back to Top
Post Your Feedback