The Director-General of Small and Medium Enterprises Development Agency of Nigeria [SMEDAN], Muhammad Nadada Umar, has called on micro-finance banks in the country to charge friendly interest rates on loans granted to small businesses, saying there was no justification for high interest rates charged by conventional and microfinance banks.

Speaking in Kaduna while signing a Memorandum of Understanding [MOU] with Abokie Micro-Finance Bank, the SMEDAN Chief Executive also described as unsustainable the trend in which micro, small and large enterprises are exposed to the same interest rates.

Access to working capital, as well as prevalent ignorance of principles of entrepreneurship, has been a great challenge to the development of micro, small and medium businesses in Nigeria. To ensure that trained micro entrepreneurs gain access to working capital, the Small and Medium Enterprises Development Agency of Nigeria [SMEDAN] signed the Memorandum of Understanding [MOU] with the Kaduna-based Abokie Micro-Finance Bank Limited.

“Abokie in Hausa language means friend. It is my hope that Abokie MFB and, indeed, all MFBs operating in the country will be friends of small businesses”, he said. Muhammad Nadada Umar stated the commitment of SMEDAN to facilitate access of the MFB to windows to cheap funds for on-lending to small businesses.

The Director-General of SMEDAN, Muhammad Nadada Umar and the Agency’s Legal Adviser, Mrs. Constance Nwaogu, signed on behalf of the Agency while the Chairman Chief Joshua Ogunlowo and Dr. Yakubu Danladi, the Director of Abokie Micro-Finance Bank Limited signed on behalf of the micro-finance bank.

Under the agreement, SMEDAN shall be responsible for the provision of entrepreneurship training and other Business Development Services to identified micro entrepreneurs through the use of qualified experts and accredited Business Development Service Providers [BDSPs] to enhance their knowledge and skills business management.

SMEDAN’s responsibilities also include issuance of certificates to micro entrepreneurs upon completion of their entrepreneurial training as well as recommend the AMFB to any source of funding that the Agency may, in the course of its operations, come in contact with.

 Moreover, SMEDAN would ensure the interfacing of the AMFB with machines suppliers and relevant public institutions and organizations the Agency has relationship with.

On its part, the Abokie Micro-Finance Bank Limited would create a window for funding Business Development Services[BDS] for micro entrepreneurs from its surplus resources to further enhance the access of these entrepreneurs to critical Business Development Services [BDS].

AMFB is also expected to provide credit and/or other debt and equity financing facilities to micro entrepreneurs who have successfully undergone requisite entrepreneurial training provided for under this MOU, as long as the micro entrepreneurs satisfy the lending criteria of the AMFB.

Furthermore, AMFB shall maintain a register of micro entrepreneurs that have benefited from the bank’s operations and exchange information therein with SMEDAN periodically.

Also speaking on the occasion, the Chairman of Abokie Micro-finance Bank, Chief Joshua Ogunlowo, assured the Director-General of SMEDAN that they were determined to make the collaboration with the Agency work. “Our hope is based on the quality and level of commitment of our management team which can translate dreams into reality”, he said.