In an effort to boost the country’s non-oil export sector, the Nigerian Export Promotion Council (NEPC) has provided Micro Small and Medium Enterprises (MSMEs) in export enterprises with accessible financing choices.
In fact, the council stated that the decision was appropriate in light of the country’s diminishing economic resources and its excessive reliance on oil resources.
This was said during a workshop on export financing that the council organized in Lagos, according to the executive director of NEPC, Dr. Ezra Yakusak.
The workshop, according to Yakusak, who was represented by Esther Ikporah, Deputy Director, Export Development and Incentives, could not have occurred at a better time than now given the nation’s economy’s continued decline and the skyrocketing costs of goods and services. She also noted that the issue of financing has evolved into one of the biggest challenges MSMEs in the export sector currently face.
According to Prof. Joseph Nnanna, Chief Economist at the Development Bank of Nigeria (DBN), the bank has disbursed approximately N512 billion to more than 225,000 MSMEs over the course of five years.
The CEO of NEPC asserted that MSMEs continue to be the engine of the global economy and emphasized that finance is the catalyst for industry-specific growth.
“Exporting MSMEs must be aware of the different financing choices that are accessible to them and they must be familiar with the numerous intervention chances available to support their company operation if we want our economy to advance.
It is well known that finance gives exporters with worldwide sales a way to manage their cash flow because the conditions of payment between the supplier and the buyer are frequently worked out later on. According to him, export financing allows SMEs the chance to obtain operational money before foreign customers pay for the goods they have ordered.
He emphasized that every business has two main objectives: to turn a profit and expand, and he added that export finance enables MSMEs to grow and improve.
The top economist claimed that for his part, 67% of women and 27% of youngsters have so far profited from the payout.
He also mentioned that more than 18,669 MSMEs in economically underdeveloped areas including Borno, Adamawa, Katsina, Yobe, Zamfara, and others have received N10.3 billion in funding to date.
Even though the Central Bank of Nigeria (CBN) and banks have designated the SME segment as vital, just 5% of commercial banks’ entire loan portfolio goes to MSMEs. He attributed this low involvement to commercial banks’ lack of understanding of the SME sub segment.
He listed a few of the typical justifications given by banks for rejecting SME loan applications, including a lack of collateral, issues with one’s credit history, a lack of profitability, and incomplete loan applications.
The conference, according to Mr. Samuel Oyeyipo, Regional Coordinator for the South West of the NEPC, and Mrs. Ofonedu Florence, Head of Department for Product and Market Development, is intended to give participants access to information that will improve their ability to obtain funds for expanding their export businesses, improving the caliber of their products, and expanding their market reach.
In order to achieve uniform standards capable of producing comparable, trustworthy, consistent products and packaging that would be acceptable in the global market, he said, “it is pertinent to explain that in your work as exporters lies the responsibility of ensuring effective utilization of funds and enhanced skill.”