How The Senate Is Making Access To Finance Easier Small Businesses By Abubakar Bukola Saraki

A 2016 NASSBER report highlighted that only 3% of SME owners that were surveyed, revealed that they had received their start-up loans and capital through formal financial institutions like banks.

This is because SME owners often do not have the collateral or the assets requested by banks before they are given loans.

This is why, this month, as part of the 8th Senate’s ‘Economic Reform Agenda’ to make the Ease of Doing Business in the country easier, we have focused on passing laws that will create more opportunities for SMEs to access the credit that they need to grow.

Just yesterday, we passed the Independent Warehouse Regulatory Agency Act. This Bill solves the problem of collateral by allowing businesses to secure loans using commercial warehouse receipts.

Additionally, with the Secured Transactions in Movable Assets Bill, which passed on the 9th of May, 2017, business-owners will be able to access credit using movable assets like cars, jewelry, and computers.

These reforms will also serve to liberate our financial services sector from the fixed asset system which currently places too much emphasis on land as the base capital. This will create more leverage for our banks and credit agencies to lend more to the real sector.

The Senate has focused on these reforms because the facts speak for themselves: our SMEs employ 84% of our workforce. Hence, if our SMEs are provided with opportunities for sustainable growth, our economy thrives, and we as a nation are all better of.

Reported by Amobi Victor, Abuja