Following a review of the processes involved in the selection of beneficiaries of the 5 billion naira credit facilities allocation for small business enterprises in Nigeria, the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) has necessitated the submission of Corporate Affairs Commission (CAC) certificate and Tax Identification Number of applicants as mandatory requirements to secure the loan.
This was disclosed in an interview with our correspondent on Wednesday in Abuja by the Head of Corporate Affairs, Moshood Lawal. It was reported by the PUNCH that an agreement to disburse loan options ranging from 250,000 to 2,500,000 at a single digit interest of 9% facilitating the growth of small scale enterprises through enhanced financial access was signed by SMEDAN with Sterling bank. The credit however has a period of 12 months to enable small scale businesses utilise the facility fully while targeting the assistance of over 10,000 small and medium enterprises.
The development was described by the SMEDAN DG, Charles Odii, who spoke at the signing ceremony as "an important milestone in our efforts to stimulate economic growth and drive prosperity by enhancing SME access to finance. We believe that the financial support, which comes at a very competitive rate, will help SMEs expand operations, hire additional employees, and contribute to an overall upswing in beneficial trade and economic activities.”
In a four-month interval update, the spokesperson of the organisation explicated that there has been the development of a software application chiefly developed to fast track the process and eliminate every form of human interference thus yielding credible process and results.
The spokesperson submitted that the request by SMEDAN to submit CAC certificate and Tax Identification Number was a pragmatic move to fish out counterfeits and fake applicants and ensure that the funds are accurately allocated to qualified individuals.
“Concerning the N5bn loan for small businesses, We have developed an app and it is ready now. We are now taking submissions via the software application. Everyone is expected to download it, put in their business plan and every other detail. Then, they would be evaluated on the app.“We had to move to an app to avoid human interference because almost everyone had a brother or a sister who tried to influence the process. So, it is better to register via the application, upload the Corporate Affairs Commission certificate, Tax Identification Number and other necessary documents. Once that process is fulfilled, the request will be evaluated and those qualified will get a reply immediately but if we had continued with former procedure, the process may be influenced.
“We also noticed that most applicants do not have their CAC certificate and that is a very important document to be submitted. Some persons have claimed not to have these certificate but we have insisted that it would be a very important criteria to receive the loan or they would be ineligible. We have promised to be transparent about this initiative and that promise will be kept.” These were the exact words of the spokesperson of the organisation.
When quizzed on the standing of applicants who had registered before now, the Corporate Affairs Commission (CAC) DG, Moshood Lawal simply explained that applicants in this category are required to start the process afresh with the use of the recently developed application to be considered eligible and qualified for the disbursement.
In his words, “Everyone that initially applied for the grant would have to do it again. During the former procedure, they were not asked serious questions, they were only told to register but now we are asking specific questions on how the money will be utilised, the business turnover per month. It is via those questions we will be able to sort out real businessmen and fake ones.
Reports gathered from the PUNCH estimated the number of small scale businesses that indicated interest in obtaining the credit facility to be over 200,000 with successful applicants receiving emails from the bank.
The SMEDAN DG reiterated that around three million businesses folded up due to certain factors such as insecurity, fraud, global market saturation and lack of easy business navigation in the past years. These factors cumulatively had led to high mortality rate of small scale businesses in the country.
In the meantime, financial experts are of the view that the recent access to finance will serve as a catalyst that will speed up the growth of small scale businesses and also emerge as facilitator of economic advancement, key players of employment opportunities and economic development.
