- October 11, 2017
- Posted by: Racheal Abiola
- Category: ECONOMIC NEWS
The Bank of industry, the small medium and medium enterprise development agency of Nigeria and the Nigeria Export-import Bank have hired the services of a rating agency to conduct rating on the Micro,Small and Medium Enterprises operating in Nigeria.
Dun and Bradstreet Nigeria Limited a rating agency, has been authorized by the listed agencies of government to conduct due diligence analysis on existing SMEs in Nigeria.
Parties involved in the development signed a memorandum of understanding at an event that was chaired by the Minister of State for Trade and Investment, Aisha Abubakar on Thursday in Abuja.
Nigeria currently has over 37 million SMEs,with most of them adjudged nonviable due to challenges which include lack of access to finance and poor infrastructure, a development that make many of the firms susceptible to early demise
Abubakar said access to finance was the major challenge confronting the country’s SMEs, but expressed confidence that with the coming of the rating agency, the growth of the SMEs in Nigeria would be boosted
She said, “The proposed credit rating agency will complement this effort by providing an objective opinion on the potentialities and creditworthiness of the MSMEs. A rating agency typically should design scoring solutions for the SMEs. Financial institutions will use this rating to decide the kind of relationship they will develop with the SMEs in granting loans.”
The BOI’s Managing Director, Olukayode pitan, said the decision by three agencies to engage a rating agency to conduct due diligence analysis on all the SMEs was very important.
He said with over 37 million SMEs in the country, contributing 48.9 per cent to the GDP, it remained a sad development that the sector was getting only about 0.29 per cent of the total loan granted by financial institutions
Pitan explained that banks had problem in extending finances to the SME sector, adding that their reluctant to intervene in the industry was stemmed from various reasons, as the most significant factor was the high risk nature of the SMEs
Culled from Punch Newspapers as published on October 6, 2017