SME Fund critical to national development : Wemi Jones. - TREAT P WORLD


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Tuesday, 10 October 2017

SME Fund critical to national development : Wemi Jones.

Mr Wemi Jones A chartered stockbroker and banker, and an authorised dealer
on the Nigeria Stock Exchange floor , has said
for the country to see desired development in the economy , a
Small and Medium Enterprise Fund must be established .
He noted that the fund must have a single- digit interest rate
arrangement for borrowers .

Jones said the peculiar nature of the country ’s business
environment required a conscious and strategic approach to
distort the status quo and give the economy the needed boost ,
especially now that it had gradually exited recession.

He said the Nigerian banking industry had really grown and
commended some policies of the different Central Bank of
Nigeria governors.

But he stressed that more should be done to impact on the
businesses of various SMEs in the country , so that major positive
economic impact could be felt .

According to him, the current interest rate regime in most
commercial banks for SMEs only leaves the SMEs to struggle all
through, with little or nothing to show for their efforts over the

He said , “ In the past , banks were very small and there was a
proliferation of banks prior to consolidation in the industry .
Now, banks are stronger and more stable; and should be able to
do more as far as the SMEs are concerned .

“ But the Nigerian banks are not as supportive to small
businesses as they ought to be . Some show interest when they
see that the business you are proposing has the propensity to
repay the loan being applied for . The banks can still do a lot

“ Banks are very attracted to short- term financing at the expense
of long term , and such disposition cannot do much to turn the
economy around positively and guaranty meaningful
development . In Nigeria now , the bank are doing so well while
the companies , which are giving the banks business , are not
doing well . That means there is a fundamental problem ”

Rising overheads in most of these companies , according to Jones ,
is the major reason why they are not doing well ; of which the
overheads include diesel , security , tax expenses , among others .

Jones , who runs Ibietan Farms Limited (an integrated farm
located in Aiyede, Kabba/ Bunu Local Government Area ), said
about 50 per cent of his firm’ s overhead was on diesel .

For businesses in Lagos, he said because of the current situation
at Apapa, the price of diesel had gone up ; not due to scarcity of
the product , but because trucks could not access the points of
loading .

He said , “ Some businesses can close down if this situation lingers
for another three months or less . Margins of businesses are
being eroded by these rising overheads. Also , multiple taxation
is causing our running costs to rise as all kinds of tax are levied
against businesses amid challenges they are being confronted
with. ”

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