In order to minimise the frequency of business failures in Nigeria, which often lead to non-repayment of loans, the Bank of Industry (BOI) has disclosed plans to provide business development support for the Small and Medium Enterprises (SMEs).
Managing Director of BOI, Mr. Rasheed Olaoluwa, made the disclosure in a presentation at the senior executive course 36 of the Nigeria Institute of Policy and Strategic Studies (NIPSS), Jos, Plateau State.
He said the business development support programme would help give necessary direction to any entrepreneur with viable business plans with a view to averting business failure responsible for non-repayment of loans.
“We are setting up a loan monitoring unit and that will address the issue of non-repayment of loans. In addition to that, we are in the process of appointing business development support plans that will hold the SME right from the point of applying for the loans through documentation, providing of securities,
disbursement, and utilisation all the way until the full recovery is achieved.” He added: “This business development support plans are at the point of being appointed and we believe that it will improve the performance of the SMEs.”
The bank CEO however denied allegation that the bank’s loan conditions were unnecessarily cumbersome, stressing that as much as any intending entrepreneur can proffer answers to four basic questions, the loans would be readily made available.
Defending the bank’s position, he also said: “As a promoter, as an SME operator and as an entrepreneur, I will ask you only four questions and if you can answer the questions satisfactorily, you can be sure to get support from BOI. First, what product are you offering, second, who are your target customers, thirdly what is your value proposition, that is, what is about what you are offering that is so appealing that people are going to buy it. He continued: the fourth thing, according to him, is value proposition, how to deliver it. “Believe me, if you can answer those questions correctly, BIO will support you”, he said.
On the low level of loan performance in the banking sector, Olaoluwa advocated the establishment of commercial courts to speedily deal with the issue of loan defaulting. He said most banks in the country had gone down because of inability of customers to report loans.
He added: “We need efficient commercial courts. We need access to funds to finance our businesses, but we also need to understand what the financial system is going through. When a bank collapses, nine times out of ten reasons why it collapsed, is because they have not been able to recover their loans.
“I know there are bank cases that have been in court for the last 5five to seven years, with such banks trying to recover loans that have proven very difficult because such cases are locked up in our normal courts. One way to address it is to have commercial courts that can fast track process for foreclosure of defaulting banks loans.”