June 21, 2009

$8.4m grant for micro finance banks

EXECUTIVE secretary/chief executive officer of the Nigerian Investment Promotion Commission, Alhaji Mustapha Bello, has disclosed that six micro-finance banks in the country will receive about $8.4 million grant this year. Bello who spoke in Kaduna at the Business Development Services fair jointly organised by the World Bank and the Federal Government, said the lifeline was to address the problem of poor access to loan and equity capital confronting micro, small and medium enterprises in Nigeria.

President Yar Adua

President Yar Adua

Bello said the grants awarded by the MSME Project, a joint pilot project of the Federal Government and the World Bank, were expected to attract over $20million worth of new private sector investment to the micro-finance institutions, adding that the six micro-finance banks are currently serving over 800,000 active clients, including over 50,000 active borrowers.

He said: “Access to finance is a significant problem for micro, small and medium enterprises (MSMEs) in Nigeria. MSMEs have poor access to both loan and equity capital.

To overcome these constraints the project through its access to finance component has broadened and deepened finance provision to MSMEs through the introduction of new financial institutions. A total of $8.4million of grants has been approved for six micro-finance banks -ACCION, SUSU, IMFB (opened a branch in Kaduna), MIC, LFS, and Microcred (will be operating from Kaduna)…

Earlier, the team leader, World Bank/MSME Nigeria Project, Mr. Emeka Ile said that the project was working in Kaduna State with the New Nigeria Foundation to promote rice production chain.