Paucity of funds responsible for SMEs’ underdevelopment – SMEDAN DG


The Director General, Small and Medium Enterprises Development Agency (SMEDA), Dr. Dikko Umaru Radda, has identified lack of access to affordable finance as the major factor militating against the growth and development of small and medium scale businesses in the country.

Dr. Radda stated this in Lokoja during a  sensitisation and awareness creation  programme  on the proposed Small and Medium Enterprises Rating Agency (SMERAN) organised by the agency  for stakeholders  in Kogi state.

The director general was represented by the North central zonal coordinator of SMEDAN, Charity Abah. He lamented that despite the pivotal role of the sector in boosting the economy of the country, it was plagued by a myriad of challenges which include lack of management skills, lack of access to finance,  lack of access to local,  regional and global markets, among others.

He said majority of the Micro, Small and Medium Enterprise (MSMEs) in Nigeria are operating as informal entities, adding that as a result of the challenges, the sector do not have the capacity to maintain minimum corporate governance standard.

“Also as a result of this, most fund providers do not feel confident extending loans to enterprises whose track records are neither known to them nor easily verifiable which ultimately contributed to the inability of MSMEs to access affordable credit,” he stated.

Speaking further, Dr. Radda stated that the proposed  establishment  of Small and Medium Enterprises Rating Agency (SMERAN) if scaled through would reduced the turnaround time in MSMEs’ access to funds and other critical resources.

“The proposed SMERAN provide investment information and credit rating services including credit rating equity grading and mandated studies spanning diverse industrial sectors within the MSMEs sub-sector in Nigeria.

“The project will also provide rating services to ascertain the credit worthiness of issues of debt obligations, of debt instrument,  and in some cases,  of the services of the underlying debt,  but not of individual consumers,” he said.

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