The Disconnect In Funding The Nigerian MSME Market

#1 · July 18, 2019, 11:06 AM

It is high time Nigerian Banks deviate from the generic template of granting credit facilities to the MSME market. If we really want to support the real sector and grow the economy, we must analyse each MSME customer on a case by case basis, understanding her unique cash flow, value chain and specific funding gaps.

The reliance on account turnover, sector classification, and un-explainable financials as a precondition for granting credit facilities must stop.

#2 · July 18, 2019, 11:20 AM

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#3 · July 18, 2019, 11:27 AM

On your point, you are 100% correct. Nigeria needs to redesign how it makes credits to small businesses. Our model remains primitive and must evolve if we hope to deepen our competitiveness and entrepreneurial capitalism. A national credit bureau using BVN is urgently needed.

#4 · July 19, 2019, 7:10 AM

What firms have access to the bvn data aside credit bureans like chams and banks? I know we have to protect the data of the people in bvn, but am sure prof can tell us more how many percent to our gdp an effective credit history would add to us. We really need to move on this low hanging fruit.

#5 · July 19, 2019, 5:24 PM

You can read this piece.

Nigeria is a cash-based economy. For years, the government has been trying how to re-wire the economy to make it credit-based. The Cashless Policy which encourages electronic transactions and the BVN (Bank Verification Number) policy which links biometrics with bank account numbers are some initiatives government has used to drive this redesign. Through Nigeria Inter-Bank Settlement System (NIBSS), the financial institution can easily build a good chart of any Nigerian banking customer through its BVN. When you add NIMC (National Identity Management Commission) Identity Number to it, you have a new dawn.

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The Disconnect In Funding The Nigerian MSME Market

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