In a bid to help household owners and Small and Medium Enterprises (SMEs) in Nigeria overcome the adverse effects caused by the Corona virus, the Central Bank of Nigeria (CBN), through NIRSAL Microfinance Bank, has announced the reopening of its portal for Micro Small and Medium Enterprises (SMEs) and households affected by COVID-19 to access up to $70,000.
Chairman, Nigeria Association of Small and Medium Enterprises, Abuja, Abiodun Ihebuzor says the initiative is laudable, adding that each of the banks in Nigeria will give 5 percent of its profit for this purpose.
He also noted it is difficult to state how many Nigerians have been able to access the fund so far, but as at October 2020, about 14, 600 people have been able to access the fund including 250 SMEs.
“It is actually a timely intervention looking at the effects of Covid-19 on SMEs. It has provided a high-level succor, this is a facility that comes to small business owners at less than 9 percent, precisely 5 percent but when you add up other charges in terms of processing and management fee it still sits at below one digit of 9 percent,” he said.
According to the Central Bank of Nigeria, household owners whose livelihood was affected by the Corona virus and business owners whose business activity was affected by the pandemic are entitled to the loan however, some complained the process is rather too long
Daniel Odi, Founder, The Farm located in the central district of Abuja says he applied for the loan since July last year and had done the required training and interview but since then he has not been able to access the fund.
“If I wanted something since July last year, it’s almost a year now, whatever I want to do with the money is defeated already. I actually wanted the fund to expand my business,” he noted.
It is a good idea because some businesses suffered during the pandemic and some people had to shut down. I heard about the loan but it seems cumbersome,” said business owner, Solio Jones.
“I know about the loan but I don’t believe in it because I believe the people at the top will share the money within themselves,” said Chimezie Israel, another business owner.
However, Ihebuzor noted that the procedures are not cumbersome. He says in terms of procedure it is simple but in terms of practice, it could be difficult.
“In terms of effectiveness, it is a little bit early to say it is not yet satisfactory. It is not yet satisfactory because there are a lot of disgruntling comments from individuals who have applied and it is first of its kind in the country, it is a learning process,” he added.
He explained that to access the fund, an applicant needs to be trained for 5 days by the Enterprise Development Institute (EDI) approved and recognized by the CBN.