AS the nation searches for leeway to boostng its economic growth, the Group Managing Director/Chief Executive of Union Bank of Nigeria Plc, Mrs Funke Osibodu has called on the Federal Government to comprehensively address the structural, infrastructural and environmental problems of the Small and Medium Enterprises (SMEs) .
She made this call following a comprehensive review of the SMEs at the sixth NASME Board of Trustees meeting, held in Lagos, recently.
Although, successive governments have over the years come up with various intervention funds to support the sector, she said, the success level has been minimal. In contrast, Nigeria’s SME sector is still regarded as high risk by financial institutions and investors due to the high failure rate of SME projects.
The Union Bank boss attributed this to the pitfalls associated with schemes like NERFUND, SMEEIS, and SMECGS which emphasised primarily on the provision of funds for which structural, infrastructural and environmental constraints were not comprehensively addressed.
The sector, she averred, is still bogged down with deteriorating macro-economic and environmental problems like unstable inflation, price volatility, uncertainty of demand, inadequate fiscal incentive and framework, unstable and adverse policies, legal framework and taxes, restricted access to credit facilities for upgrade technology, among others.
Osibodu observed that some of these problems are inherent in the very characteristics of small business and start-ups; others are a direct outcome of economic changes, which may affect the SMEs in a more critical manner than the big businesses.
Consequently, she said the new Jonathan administration should create a more supportive business environment that is suitable for establishing and developing SMEs in Nigeria.
Osibodu believes that government needs to foster the relationship between large enterprises to invest in developing the capabilities of SMEs, especially in local raw materials.
Union Bank is a pioneer member of NASME and served in the various committees of the body. It is also the first bank to have established a full-fledged department for SME. The bank had in 2007 sponsored a NASME conference on Developing Strategic Partnership and Alliances between large organisations and SMEs.