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Why most SMEs cannot access funds – Ubiji, NASME boss

Why most SMEs cannot access funds – Ubiji, NASME boss

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NASME is made up of micro, small and medium enterprises and also some governmental agencies as members.

Ayo Alonge

Eke Ubiji is the Executive Secretary of National Association of Small and Medium Enterprises (NASME) as well as the Chief Operating Officer of NASME Quality Assurance Limited, a subsidiary of NASME. In this interview, Ubiji x-rays the myriad of challenges bedeviling the Small and Medium Scale Enterprises (SMEs) in Nigeria, while proffering the way out.

READ ALSO: 4 Nigerian SMEs for intra-African trade fair in Cairo

The Association

NASME is made up of micro, small and medium enterprises and also some governmental agencies as members. Basically, NASME’s major role is to advocate for policies that would help to promote the development of SMEs in Nigeria. That is our fundamental objective. We do that in many ways which include through advocacy. Recently, we did that by impacting on people as to the importance of tax on SMEs. We have run advocacy on electricity tariff too. On the African Continental Free Trade Agreement (AfCFTA), we have had a lot of impact on that and even on policy formulation. Many at times, government invites us to present position papers. NASME is also represented in the MSME Council being chaired by the Vice president and several other committees. NASME served in the recent Minimum Wage Committee that was constituted, and so many more that I can’t even recall. Basically, our role is to advocate for positive polices that would help develop the SMEs in Nigeria.

SMEs

We advocate for policies in a lot of ways. We have really impacted SMEs in Nigeria. For example, on the issue of tax advocacy in 2016, it was an evidence-based advocacy.

We used a very credible firm in Nigeria to conduct a research on the impact of immoderate taxes on SMEs. We used Deloitte, a big chattered consulting firm and they came to with something remarkable which we presented to the authorities. After that, we organised another forum and the Chairman of Federal Inland Revenue Service (FIRS), Mr Babatunde Fowler, was there. Other agencies too where there when we did the advocacy. We said that if you want SMEs to pay tax, you have to moderate it, and they saw reasons with us. The advocacy was done in November 2016 and the next day, Fowler advertised in six national dailies, telling the public that if they want to benefit from the programme of the FIRS for SMEs, they have to be members of NASME. That really gave us prominence. A lot of our members applied and it worked well for the association. Another fall out is that we advocated that government should set up a Tax Review Committee and it was headed by Professor Abiola Sanni of the University of Lagos. We made our positions clear to the committee and we were heard. From that, the Tax Policy was introduced and it incorporated most of the things we proposed. How do you ask a new business to start paying tax? No, you are to give them a waiver and and low them stabilise before they can start paying. We also did an advocacy to tell the SMEs to enter the tax net. A lot of SMEs are afraid because they don’t even know what it entails.

Funding

In the area of funding, we don’t have the money to give SMEs but we advocate for funds to be provided at all levels. We beckon on the government, through the CBN. Part of such advocacy is the MSME Development Funds. The CBN proposed N220 billion for that and that is because we were in that committee. We agreed that 60 percent of that fund should go to women entrepreneurs. The major challenge is not about access to the funds but the constraints which is about collaterals for funds. How many SMEs can provide collaterals? So, we spoke with the CBN to come up with the Collateral Registry. It is not only those who have landed properties that should access funds. If you have jewelry, cars, televisions, etc, all that can serve as collaterals too. Today, that Collateral Registry now has an act that establishes it. Nobody will say that because you don’t have a land, you can’t access funds. So, these are some of the numerous achievements of NASME. We understand the pains of SMEs but being a credible association, we shouldn’t be biased.

In as much as our turf is the SMEs, we have to make our members do the right things. SMEs must package themselves properly. Nobody will give you money for you to eat it. By packaging, I mean that, capacity wise, have you improved yourself to manage the funds? Do you keep your books? You can’t give money to someone who doesn’t keep proper books because you must account for it. We also try to train our members in the area of capacity building. Have you made yourself attractive to banks? How is your business run? Is your products also well branded and up to set quality standards? For instance, NAFDAC will want to pay attention to you for any approval, if you are a member of NASME. We want to help members so that

when we are talking to the CBN and the Bank of Industry, we talk with substance. If we are biased because we just want to defend our members, it will be shown. For instance, we can talk to NAFDAC on behalf of an SME that is being charged so much for getting NAFDAC number. At the same time, we talk to our members to ensure they do the right thing. Once the organisation has a bad name, we are finished. If we must maintain our credibility, we have to be firm and fair.

Sectoral revolution

There have been quite a lot of policies that we have used to revolutionalise the SMEs in Nigeria but I can say that the one in 2012 on electricity was massive for us. It is called Multi Year Tariff Order (MYTO). That was the tariff on power. When government was trying to regulate the activities of the then Power Holding

Company, that was when GenCos and DisCos came up. The issue of fixed charge was N500. We also conduct researches to be sure of the substance of our advocacies. We don’t just come and mount the podium and start talking. It was during the process of fact finding that we discovered that what some DisCos were charging as fixed charge here was different from what the DisCos were charging elsewhere. So, we ensured it was slashed down. We also said the charges of SMEs should be reduced. And again, another commendable achievement is for a tax policy to be formulated. There are a lot that NASME has done.

Capacity building

We have always talked about access to finance. We just concluded our annual seminar where we agreed that access to funds is key. We also brought the key players to come and tell people how to really access the funds and the conditions attached. The SMEs are always there to ask questions too. The CBN too was there. As of today, the Development Bank of Nigeria (DBN) has become a focal point in the area of providing funds to SMEs, even though they don’t lend directly.

They tell you the funds they have and they channel it through the commercial banks and some other institutions. If you stay in your house, you can’t access such information until you come close to NASME. Whenever we hold such seminars, we waive off the participation fee to encourage people to come. Sometimes, we even augment their transportation costs. If you put a fee, the excuse might be that they don’t have the money to pay. We make you attend for free and even feed you.

Membership

For you to be part of NASME, you must have registered with the Corporate Affairs Commission. We also want to know the sector you belong to. There are different categories of membership namely: micro, small and medium. The micro is N10,000, the small is N30,000 and medium is N50,000. Then, there are others which include corporate, and that is N70,000. Then, big institutions like banks pay something totally different. I just focused on the SMEs.

READ ALSO: CAC Registration: Lagos SWAN rejects national body’s position

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The post Why most SMEs cannot access funds – Ubiji, NASME boss appeared first on The Sun Nigeria.

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