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CBN should revive SMEEIS– NASME

By Naomi Uzor
In this interview conducted by Naomi Uzor, The President of NASME, Dr Ike Abugu  urged the Governor of Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi to revive the SME banking

Sanusi
Sanusi

What is NASME all about?
NASME is a unique business membership organisation, unique in the sense that our structure is different from that of any other BMO , it is an association of small and medium enterprises but they are what we call support institutions that work with us, and they are also what is called the pillars of SMEs in this country.

Among the support institutions, we have big financial institution like First bank, Union bank and some of them, then we have government ministries and department, either they are members of NASME or they are supporting NASME one way or the other, so that is the uniqueness of NASME.
Are you, as the president, satisfied with the present status of NASME?

No, I am not, we could be doing much better as an organisation, you see, an organisation of small and medium enterprise that does not draw government subvention, we do not get money from government and it is deliberate, the whole idea is the membership, the strength of an organisation like this is the large number of members,  there are visually millions of SMEs in the country but you need to get them interested in joining, so many people do not understand why they should join themselves in networks, so many people do not do it, they think it is a waste of time especially if the person is succeeding, if he is a successful businessman, he will say these people are just idle, because he will not understand how a busy businessman will find time for things like this, but he will not understand that no matter how successful you are, one day you will hit a brick wall and then you run to an association, we have access to government and even the presidency, we have access to any minister or governor and that is the major function of an organisation like ours, credible platform and we use it to press for policies that will be favourable to us, no matter how much you have as an individual, you can not do much.

We want to make it acceptable, the more membership we have, the more credible we are, the more people would want to join but the other side of it is that in other countries, an organisation like ours gets government support, not necessarily in the form of cash but if government is doing something and they get you involved, for instance an exhibition outside the country and you have products that can be exported, we can take care of that, invite you during the delegation if they need made in Nigeria goods thereby opening up the export market, but also, to take the other side of the matter, NASME is actually the youngest of the business membership organisations, MAN is over 50 years old, an organisation like LCCI is over a century old, then NACCIMA is even older, NACI is older than NASME so relatively, considering the harshness of the environment, I think NASME has not done badly, the strength of NASME is in the commitment, the quality of the people we have, not necessarily in the quantity, we will have a large number later, but the quality and the kind of uncommon commitment that we find among those who are piloting the affairs of  NASME, because we belief strongly in what an organisation like this can achieve.

What is the structure of your constitution in terms of financial institution, are you involved in only banks owned by federal?
To the best of my knowledge, of all the financial institutions that I mentioned, only the Bank Of Industry is owned by the federal government, I mentioned First bank and Union Bank. Oceanic Bank  is one of our trustees we have been monitoring  it and even from the beginning, it has had interest in SMEs, in-fact, Oceanic bank is supposed to be on our council, we are not adverse to privately owned banks or  family owned banks, no we just look at records and it is an open forum, we never close our doors to any financial institution but you can always tell those who are doing something really for SME and those  that are playing lip service to it, everybody is talking about SMEs, but when you look at their records, you will find out that not much is happening, they may give  out loans  and say it is for SMEs, but it is not for SMEs in the real sense, it is something else.
What are the challenges of this organisation?

Well, the basic challenges of NASME is capacity, capacity in so many ways, for instance NASME is a national organisation, we are supposed to have offices in each state of the federation and eventually even in local governments areas but that has not been possible because in other parts of the country for instance, in the north it is not so easy to organise people, either for business or economic purposes.  In the south-west, yes, they are generally speaking sophisticated and understand the importance of things like this. Also in the  South-East, South-South, not much problem, but it takes time, for you to get this thing going, you need capacity, you need the right level of skills, the right financial resources and these things don’t come easy,

so that has been part of the problem. However the basic problem is capacity to expand, to do the kind of things we want to do, not as an individual but as an organisation even in terms of the staff we need, because we could double the level of staffs we have because there is a lot of work to do, there is so much to do, but if you have to double your staff strength then you must be ready to pay, nobody will work for you for free.  We are working on that, this association has the potential to become the biggest and the most powerful business association in the country and that is the goal, the potential is very clear, once we get the these things right, this is the association to belong to.

What is NASME’s view on the rejection of letters of credit?
Well, that is actually a fall out from the current crisis that we are having in the financial service sector, it is a fall out and it is  affecting our members negatively because you can not open Letters of credit LC, you can not import, you can not even do international business and this is terrible.  It is very unfortunate, this financial crisis was not caused by SMEs debtors, it was caused by the large, mainly big and fake companies, most SMEs would use what ever loan honestly and pay back honestly and what has happened has vindicated our position all along, banks should really take more interest and loan more to small and medium enterprises instead of chasing non existence large enterprises.

So how is it affecting the SME operators?
We have not really taken any empirical record because this problem just started but i can assure you that it has a negative influence on NASME members because the country is so import dependent, even if you are in manufacturing, you still need to import your raw materials, so you cant say you are not a trader and cant be affected, no you are affected because you need to import your raw materials, for us, it is a very bad development and it is not caused by our members.  Somebody messes up a system somewhere and it begins to affect everybody, including the SMEs and the SMEs in crisis like this are always worsened because they have less room to manoeuver.

The CBN governor is one of your patrons, what is your take in his recent action on the banks?
We support his action of the CBN governor, that is what we have been saying along, that the banks are not doing real banking, we have been saying it because many of our members cant get loans, we have had instances, you will package the best proposals of this world, and maybe you are asking for just  N10m, you cant get, but somebody without collateral, will get billions, we want the CBN governor to go further, this should only be the beginning, the banks have to be made to face the real sector of the economy and if it means going back to the days that they use to give them percentages, by all means, let him go ahead.  The CBN governor, his role is so critical especially in the financial sector, When he was appointed, I wrote and said that I hope  your regime will mark the beginning of an SME friendly financial system.
Since NASME is making most of these potential individuals their trustees and patrons, would they be able to criticize them when they go wrong?

Why not, what we are doing is not an endorsement or condemnation, we are saying that the office is so important that we need to do that, remember, first and foremost, we are lobbies, whether MAN, NACCIMA, just name them, our aim is for us to make government to do the things that are necessary for our industries and enterprises, it is a pressure group. do you know the things we are doing at the national assembly, right now the corporate tax rate for SME is the same thing as what the big enterprises are paying and that is almost 35 per cent, 35 per cent of there profit goes into paying banks, some tax rates, you cannot change it just by wishing to change it you have to do a lot of lobbying, by the time we are doing our next dinner, we are going to bring in the president of the senate and the chief of the house, we also want to be friends with them, you cannot change anything by making enemies with them but that does not mean that we cannot criticize them when they do wrong, they know for that, if you do the wrong thing, something that will affect the system, i will tell you to your face, i am not your employee.

There was once a bank for the SMEs, and there is this rumour that they were not coming for loans, how true is this?
It is a long story, but i will try and be brief. It goes beyond giving them loans, because if you give me loan, whether i die or live, i must pay back. A banker will not ask you how your business is doing, all he wants is his money , that thing was a very good thing, the idea was right and it was doing well until, Obansanjo left, the bankers never liked it, you know human nature, they don’t like anything that will be taking their time, they never liked it,  it was easy for them to administer loan, that is that they will give you 10 naira to day and tomorrow you pay them their 20 naira.

The SME banking takes a lot of time, patience and scheme and the banks don’t like it. So even while it was on some of them were not ready for that, some where putting money in Tinapa, is Tinapa an SME, that is why i say that Sanusi should go further, at a point in time, these banks thought they could do all these and get away with it, immediately Obasanjo left, they started talking of optimisation , of course we are not kids , we know that it means the end of that scheme, because optimisation is if you like you do it, if you don’t like you leave it. Some of my members benefited from that scheme, it is one of the things we want Sanusi to revive, because that scheme was good and all it needed was time to mature, time for people to begin to understand how it works, it needed was patience on the part of bankers.


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