In a bid to fund/promote the growth of Micro, Small, and Medium Enterprises (MSMEs) in Nigeria, Fidelity Bank Plc and African Development Bank (AfDB), have signed a $50 million financing agreement.
During the official signing event in Abuja, yesterday, the Senior Director/Country Representative at AfDB, Ebrima Faal, signed the agreement on behalf of the DFI while Deputy Managing Director of Fidelity Bank Plc, Mohammed Balarabe, signed on behalf of the commercial bank.
How the funds will be used: AfDB then used the occasion to disclose that at least 30 percent of the fund must go into promoting businesses that are owned and operated by women entrepreneurs.
“We are excited about this partnership. The lines of credit tended to be general support for SMEs. This one has a strong emphasis on gender. It can be considered as a vanguard credit for us.
“Our main focus is to reach out to SMEs to give the much-needed impact. We count on you to ensure that the requirement for loan disbursement is okay to enable it to reach out to the target audience.”-Faal
Balarabe, on the other hand, argued that businesses at the lower level have the capacity to catalyse the development of the economy, adding that the funding was unique because of the gender specification.
“The AfDB has found us fitting to be one of the banks that will be benefiting for onward lending to MSMEs. Fidelity is one of the leading lenders to the segment, but for us, it’s not all about lending.
“Our engagement with MSMEs is more. We take time to find the needs of such businesses, and work with them on how to run the businesses.” -Balarabe
Why adequate funding of MSMEs is highly sacrosanct: The role of SMEs in enhancing economic growth and development has, overtime, been widely acknowledged globally. Economic wealth all over the world is created through enterprises and the expansion of their output.
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SMEs contribute to the economy by creating value through the production of goods and services, thus enhancing the gross domestic product. They also generate employment by creating much-needed jobs in the economy, as well as expanding the export sector largely through linkages with large firms that produce for the foreign sector.
Lack of adequate funding has been one of the major challenges facing Nigerian SMEs. For a long time, entrepreneurs have lamented the the lack of adequate provision of credit facilities. It is, therefore, a good thing that something is finally being done about the situation.