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MSME

FG to provide financial support for 1.7 million businesses, individuals in next 3 months

FG had announced specific programmes aimed at cushioning the impact of COVID-19 on MSME businesses.

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FG releases new details on MSMEs support scheme, budgets N200 billion for loans, FG says 174,574 successfully register for N75 billion MSME survival fund in 48 hours

The Federal Government has announced plans to provide financial support for 1.7 million businesses and individuals across the country within the next 3 months.

This disclosure was made by the Minister of State for industry, Trade and Investment, Ambassador Mariam Katagum, at the virtual commissioning of the Fashion Cluster Shared Facility for Micro, Small, and Medium Enterprises (MSMEs) tagged, Eko Fashion Hub, in Lagos.

Katagum disclosed that the initiative is borne out of the Federal Government’s continued commitment to helping cushion the devastating impact of the coronavirus pandemic on the economy by saving existing jobs and creating new job opportunities.

READ: FG releases new details on MSMEs support scheme, budgets N200 billion for loans

The minister said that President Muhammadu Buhari’s administration, through the Economic Sustainability Committee, had announced specific programmes aimed at cushioning the impact of COVID-19 on MSME businesses.

Specta

She said, “The Federal Government is fully committed to empowering Nigerians; more so in the face of the COVID-19 Pandemic. In this regard, the government, through the Economic Sustainability Committee had announced specific programmes aimed at cushioning the impact of COVID-19 on MSME businesses.

“These programmes include among others, the N75 billion MSME Survival Fund and Guaranteed Off-take Schemes of which I have the honour to chair the Steering Committee for the effective implementation of the projects.

READ: NNPC reveals survival strategies to cope with the oil sector downturn and new normal

“The project, which will run for an initial period of three months, is targeting 1.7million entities and individuals and has provisions for 45 per cent female-owned businesses and five per cent for those with special needs. The registration portal for the schemes is set to open on Monday 21st September 2020 and I urge you all to take full advantage of the schemes.’

The Nigerian Economic Sustainability Plan which was produced by a committee headed by the Vice President, Yemi Osinbajo, is a response to the health and economic challenges which foisted on the country by the outbreak of the novel coronavirus pandemic.

READ: FG to save N1 trillion annually from petrol subsidy removal

Aside from developing robust monetary policies and fiscal measures to enhance oil and non-oil government revenues and reduce non-essential spending, the plan also includes a N2.3 trillion stimulus package for the economy.

Katagum said that the schemes were at the core of the N2.3 trillion stimulus package being implemented by the Federal Government. She said that the commissioning of shared facilities was also expected to provide succour and relief to the teeming micro-businesses in need of space and infrastructural support

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

3 Comments

3 Comments

  1. Edube Williams Okwo

    September 21, 2020 at 2:51 pm

    I pray and hope that for once I and others like me will benefit from this Govt. Program to take us out of the mess that the lockdown has brought our way. Please kindly let us know the criteria and steps to take. Thanks

    • Benjamin

      October 30, 2020 at 10:51 am

      How can we access this , because I will be glad if gov. Will do as the say here

  2. Auwal Abdullahi

    November 21, 2020 at 7:28 pm

    My problem is my business

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Business

African leaders should support MSMEs for rapid recovery of economies – Report

African leaders would help speed up the recovery process in most African economies if they can continue to support the MSMEs.

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Development Bank of Nigeria , Companies Allied Matters Act (CAMA)

African leaders have been enjoined to promote and support policies that would strategically support the Micro, Small and Medium-sized Enterprises (MSMEs) and speed up the recovery process in most African nations.

This was stated in the Foresight Africa 2021 report, a publication of African Growth Initiatives of the Brookings Institution, a non-profit organization devoted to independent research and policy solutions.

According to the report:

  • “Policymakers must continue to support businesses—both smaller enterprises and larger firms—that have been disrupted by the crisis.
  • “Arguably, the greatest priority must be to bolster the micro-, small-, and medium-sized enterprises (MSMEs) that are key to African commerce and account for 83 percent of private-sector employment in Africa.
  • “Such businesses, which number between 85 million to 95 million, are especially vulnerable to COVID-19 mitigation measures given they are often characterized by person-to-person contact. By just May 2020, 75 percent saw their revenue decline by over 30 percent.
  • Finance will continue to be one of the greatest needs for African businesses; indeed, only 5 percent of MSMEs across the continent feel they have received adequate support from lenders. Provided governments navigate Africa’s fiscal challenges with skill and determination, they can continue offering suitable financial support to small enterprises; in addition to indirect support through value chains and banks, such assistance might include loans, debt forgiveness, low-interest rates, assistance with payments to suppliers, and reduction in utility costs.”

 Ways Governments can provide financial support to MSMEs

  • There are several steps that governments can take to provide financial support to MSMEs. One option is to assist MSMEs through larger firms in their value chains, which might include upstream suppliers and downstream buyers.
  • “Governments can provide easier liquidity and working-capital terms to these larger players, and they can make such support conditional upon these firms’ providing favourable financial terms to MSMEs.
  • “Governments can also consider providing risk guarantees or first-loss mechanisms while requiring banks to on-lend under the chosen set of criteria and guidelines in order to encourage banks to lend to MSMEs.
  • “Policymakers must not lose sight of the region’s informal sector, as 84 percent of African MSMEs are unregistered. Policymakers can take advantage of the opportunity created by the crisis to convince larger numbers of informal enterprises to register, and thus gain better access to finance and markets. Moreover, to promote registration, governments could shape bold campaigns and attractive packages, potentially including multi-year tax holidays and capacity building for MSMEs.”

Why this matters

  • Micro, Small and Medium-sized Enterprises (MSMEs) are widely recognized for the important contributions they make to sustainable development, in terms of contributions to economic growth, creation of jobs, provision of public goods and services, as well as poverty alleviation and reduced inequality.
  • The pandemic has seriously impacted the MSMEs in all African nations as it has exacerbated economic hardship and may have pushed more than 40 million Africans into extreme poverty.
  • It is imperative that the African leaders focus on enabling businesses to respond effectively to these new and unfavourable conditions to which most MSMEs have been exposed to.

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Business

The FG in partnership with the private sector will continue to support MSMEs – Osinbajo

Osinbajo has stated that the FG in partnership with the private sector would continue to provide interventions to boost the growth of small businesses.

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Solar, FG to slash import duties on tractors, buses, others in 2020 Finance Bill, Nigeria will not issue Eurobonds, says Vice President Yemi Osinbajo, FG guarantees mortgage loan to low income buyers at low interest rate, FG inaugurates gold refinery project in a landmark event

Nigeria’s Vice-president Prof. Yemi Osinbajo during an MSME stakeholders’ meeting, disclosed that the Federal Government in partnership with the private sector would continue to provide interventions to boost the growth of small businesses across the country.

According to a press statement issued by Laolu Akande, the VP made this statement on Monday at the first meeting of MSMEs stakeholders for the year 2021.

Prof. Osinbajo said the Government would continue to support innovation and interventions to deepen the involvement of new and existing MSMEs in the nation, this he said would help to improve the economy and create more employment opportunities for Nigerians.

He stressed further that the implementation of the Economic Sustainability Plan Survival Funds has sent positive economic signals. In a bid to complement the gains in this space, the Government needs to scale up interventions in the MSMEs sector.

In this vein, Osinbajo urged stakeholders in the public and private sectors at the virtual meeting to be innovative in the interventions planned for small businesses across the country, so as to consolidate on the gains recorded in the MSMEs space in the past few years.

Specta

What they are saying

Prof. Yemi Osinbajo, during the MSME stakeholders’ meeting, said:

“We must continue to be innovative in the interventions that we plan for MSMEs because small businesses are the engines of growth of any economy, in the areas of wealth creation and employment opportunities, MSMEs are very important.”

Continuing, Prof. Osinbajo said:

“We really have to think out of the box in our engagements going forward. We need to change the way we do many things, we need to look for ways of multiplying our efforts because the challenges in this space are greater than what we have been able to achieve so far. Of course, we have done a lot, but looking at the numbers in need, you will find out that there is a lot more to be done.”

What you should know

  • The Federal Government’s MSMEs Survival Fund grant scheme, which includes Payroll Support, Artisans and Transport support tracks, is a component under the Nigerian Economic Sustainability Plan, NESP.
  • The Survival Fund scheme was designed to cushion the economic effects of the COVID-19 pandemic especially on the most vulnerable small businesses, is a conditional grant to support vulnerable MSMEs in meeting their payroll obligations and safeguard jobs in the MSMEs sector.
  • The scheme is estimated to save not less than 1.3 million jobs across the country. However, 283,023 Nigerians employed by MSMEs across the country have benefited from the Payroll Support Scheme. This leaves millions of Nigerians out of the consideration of the scheme.

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MSME

283,023 Nigerians employed by MSMEs have benefited from FG Payroll Support Scheme

The FG has revealed that over 200,000 persons have so far benefited from its Payroll Support Program.

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Nigerian MSMEs suffer negative impact of COVID-19

The Federal Government of Nigeria has disclosed that 283,032 Nigerians employed by MSMEs across the country have so far benefited from the Payroll Support Scheme of the Federal Government.

This disclosure was made in a tweet shared via FG Survival Fund’s official Twitter account.

What you should know

  • The Payroll Support Program by FG under the Survival Fund initiative was created to provide an adequate buffer against the impact of the COVID-19 on the stream of income of MSMEs.
  • This, however, is an offshoot of the Survival Fund initiative, established to support and protect small businesses from potential vulnerabilities brought about by the COVID-19 pandemic.
  • In line with the mandate of the programme, the government will support MSMEs with staff salaries for 3 months.
  • It is important to note that the COVID-19 pandemic and other regulatory actions of the Federal Government affected the core segments of SMEs, as well as the revenue and income vehicles of Small businesses in Nigeria.
  • According to a survey by NBS, it became public knowledge that the total number of Micro, Small and Medium Enterprises in the country was about 41.5 million, as of December 2017, with significant employment contribution running to millions.
  • In the light of this, it is plausible to say that the Payroll support programme is not inclusive enough, as the recent move by FG to support MSMEs leaves millions of MSMEs and their employees out of the radar.

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