Stakeholders Mount Pressure For Probe Into The Disbursement Of The N220bn Intervention Fund For Micro And Small Businesses By Bank Of Industry (BoI) But The Bank Says Such Calls Are Misplaced And The Allegations Untrue
Citing corruption and unnecessary stringent conditions being experienced while trying to access the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF), the Association of Micro Entrepreneurs of Nigeria (AMEN) has called on the Economic and Financial Crimes Commission (EFCC) to urgently probe the Bank of Industry (BoI) activities regarding disbursement of the fund.
This is coming on the heels of similar displeasure and worry expressed recently by stakeholders in the nation’s real sector, who have noted with dismay, the inability of many entrepreneurs to access the N220 billion SME’s funds, a development that has pushed operators in the Micro, Small and Medium Enterprises(MSME) sector, lately, to appeal to the Central Bank of Nigeria (CBN) to promptly review the guidelines for the disbursement of the intervention funds, which is aimed at assisting the operators to shoreup their production capacity.
AMEN President, Prince Saviour Iche, alleged in a chat with The UNION that officials of Bank of Industry (BoI) unduly prevent SME operators from accessing the N220 billion MSMEDF made available by the Federal Government for selfish reasons. He said it was time EFCC investigated activities of the bank.
The Bank however refuted the allegations and also dismissed as untrue insinuations that it was deliberately frustrating genuine MSME operators from accessing theN220 billion MSME Development Fund provided by the Central Bank of Nigeria (CBN). It therefore urged the agitating stakeholders to ensure they adopt the right approach in accessing the bank’s facilities as the procedure has been simplified for intending beneficiaries by the development bank.
BoI also expressed concerns that despite far-reaching strategies to decentralize its operations as well as engaging in extensive enlightenment campaigns through its zonal offices, a section of the MSME operators had grievances to express.
But the AMEN boss alleged that, “investigations by our members revealed that BoI gives out these loans to ‘ghost beneficiaries’ who are cronies of officials of the bank, whom this fund was not intended for in the first place”, adding “we challenge the BoI to publish the names and addresses of those it claimed had accessed the loans. “If you hear people say our members are unnecessarily being hindered from accessing the fund, it is the truth.
This is because they have come up with conditions that are unwholesomely so rigid for SME operators. This is equally because as the president of AMEN, I receive text messages daily from our members complaining of the sufferings they go through trying to access the fund. So, such strident conditions make it very cumbersome to access the fund”, he maintained.
Iche, who noted that some Small and Medium Enterprises owners under AMEN started the process of accessing the fund since 2013, however wondered why many of them who had met the conditions spelt out by the development institution for accessing the loan could not access it up till now. “Some of our members have been on this journey since 2013 and met the conditions by BoI for accessing the fund, because they vowed to see the end and get the loan, which personally I could not even meet at the time. But they have not been able to access the fund. The loan has not been made available to them,” he stressed.
Continuing, he said, “One of the conditions the bank gave is that an operator should open a joint account with two BoI staff as signatories and 10 per cent of the loan value paid into the account. And these two staff of the BoI have the right to withdraw the money without the consent of the SME operator (owner of the business).
And the assurance is that if this 10 percent of the loan value is paid, the loan will be released within six days; now, some of my members with a lion heart still went further and borrowed money from friends, banks and relatives with the intention that within six days, the loan would be released, and be in a position to pay back the money borrowed. But as I speak to you right now, some of them deposited this 10 percent in the last two years now; they have not seen any loan.
No loan has been released to them”. He maintained that the sudden subtle clause by the BoI that an SME operator must own a production was a swift move to further the rip-off illegally of their meager finances because, according to him, officials of the BoI connive with importers of these machines to inflate their prices.
“All of a sudden they said we must buy machines. You know what they do? They connive with the sellers of these production machines which they asked our members to go to buy. Most worrisome thing is that they don’t give you the loan in bulk; they make available a tranche of the loan for machine, a part for chemical and just a token for running capital. They will now link you up with a company they have interests in to go and buy the machine.
“Now, a machine our members would buy for N1 million if we had the money, you would go to the company they have directed you, the sellers of the machines there will inflate the price and tell you is N2 million; something you could have got for a million naira if you had gone there on your own.
This is because they will still share the money added on the machines sold, with the BoI officials who recommended them to you. We have even protested and drawn their attention to the fact that some of our members do local fabrication and can produce these machines better than what they recommend that we should buy and that the BoI should give us the money for us to buy from our indigenous manufacturers. The BoI refused.
If you go to Owode, you find that most companies had folded up owing to unfavourable conditions in the country, even sell their machines cheaper. We implored the BoI to give us this money for us to source for the machines by ourselves. They refused. I have said it in private discussions and am saying it again to you now; the EFCC should make haste and probe BoI”, he urged.
Speaking through its spokesperson, Hadiza Olaosebikan, BoI denied the allegations by AMEN and expressed surprise that the body would engage in mudslinging against the bank which had intensified efforts to support the small business operators across the country. In an SMS to The UNION on Friday, the BoI Head of Corporate Communications advised AMEN and other small business operators to avail themselves of the services of the bank through its up-country branches.
“BoI does not grant its facilities to ghost operators as insinuated by the association. Procedures have been outlined for loan approval and disbursement,” Olaosebikan said, advising that aggrieved parties to avail themselves of the channels provided to facilitate loan approval and disbursement, especially the Business Development Service Providers (BDSPs).
“The aggrieved parties should avail themselves of the appointed BDSPs in accessing BoI’s facilities,” the spokesperson stated, adding that “online platforms and applications have been created to aid ease of access to BoI facilities.” Olaosebikan explained that the bank had embarked on aggressive expansion of its operations to the grassroots by opening more branches in the states and other zonal territories.
Chairman, Nigerian Association of Small Scale Industrialists (NASSI), Lagos Chapter, Mr Segun Kuti-George, had recently told News Agency of (NAN) that his members had been unable to access the fund, despite deliberate efforts by his association to assist members in writing presentable proposals.
He had noted that the slow disbursement of the loans had made most SME operators to lose confidence in the scheme. “Up till now, we just hear that some amount has been disbursed to some SMEs. We don’t know the people who have received the funds, because I don’t think any of our members have accessed any loans,” he said.
President, Association of Small Business Owners, (ASBON), Mr Olufemi Egbesola, also said that the announcement of the N220 billion fund brought relief to members of the association but none of his members has been able to access any loan. “To me, I think the process of accessing the loans is too tedious.
You are asked for this, we bring, tomorrow they ask for something else, collateral documents and so on, even after fulfilling all the requirements, we still have not heard anything,” he lamented. However, checks on the bank’s website show that BoI has 122 accredited BDSPs across the country. They are categorized into National (28), Regional (74) and State (20).
The bank said it signed service agreements with the BDSPs “in a bid to address challenge of access to credit for SMEs, and to hasten the credit delivery process.” It said the BDSPs appointment was “based on their capacity and preferred areas of coverage to help increase SMEs’ capacity to apply for and secure financing from the Bank.”
The BoI spokesperson stated that the inability of MSME operators to prepare acceptable documentation was the major reason the BDSPs were appointed. “If they exercise the discipline of doing the right thing their loan facilities will be granted as it is the wish of BoI to empower the small business operators who are the engine room of the economy.
The bank recently disclosed that it granted a loan of N823 billion to 4, 000 beneficiaries in the last fourteen years which created over 1.8 million jobs from 2001 to 2014, and that it was working vigorously towards ensuring that the MSMEs accounts for at least 30 percent of the bank’s risk assets by the year 2019 with a single digit ratio of non-performing loans to total loans.
– Sam Diala and Edward Nnachi