By Providence Emmanuel
THE Nigerian Association of Small and Medium Enterprises, NASME, has said that micro and small businesses may not survive charges from bank loans.
Speaking with Vanguard at the just concluded Alimosho Community Trade Fair organized by NASME, Vice President, NASME South West, Mr. Oladipupo Jemi-Alade, said it is not advisable to approach a commercial bank as a micro or small business.
READ ALSO:Alaghodaro 2019: SMEs, artists, others upbeat ahead of Edo Trade Fair(Opens in a new browser tab)
Alimosho Community Trade Fair is a specialized community fair targeted at consumers in Alimosho environment to provide market access for SME products and services at discounted prices.
Jemi-Alade said that the SMEs are not recognized in Nigeria despite their contributions to the nation’s gross domestic products, GDP, adding that they face challenges arising from poor access to market, funding, lack of good business structure and capacity building.
To this end, he explained that the trade fair was an initiative that came out of NASME, Lagos chapter, after realizing the challenges of small businesses which is majorly access to market, saying: “A lot of people produce but they cannot get their product to the market place because they are competing with big businesses. That is what informed us to be having a specialized trade fair for small businesses and it is community base.
“Small businesses produce good products but it is expensive because of cost of production, they spend money to market and distribute products, so its double expenses. With the fair, they are able to sell their product at a discounted rate in the fair.
“There are lots of challenges with the Nigeria SMEs including: capacity building; access to funding: the government is not going to give anybody money to run a business and there is enough money to fund small businesses in Nigeria but the issue is that the cost of fund in Nigeria is very injurious. If I approach a commercial bank, they will give me money at 30 percent, if you approach the Microfinance Bank, which is supposed to be for small business, you end up paying 60 percent per annum, which is crazy.”
“How can any SME survive by taking loan at such price? It is not advisable to approach a commercial bank if you are a micro or small business. There are other sources of funding which people are not aware of, crowd funding, SMEs can come together and pull resources to start a business, but Nigerians believe in one man squad.
“SME is the future of the Nigerian economy, the only problem is that we don’t recognize them in Nigeria and most of them are in the informal sector. A substantial portion of our GDP is produced by small businesses.