Nigeria has a long history of community finance, micro finance, and Small and Medium Enterprises (SME) finance initiatives to
provide financial services to the unbanked population.
74 percent of
adults have never been banked
· 21 percent of adults have bank accounts
· Men have better access to finance; only
15 percent of women currently have
bank accounts
· 71 percent of salaried workers vs. 15
percent of farm
employees are banked
· 86 percent of rural adults are currently
unbanked
· 80 percent penetration rate of mobile
phones presents excellent opportunity for
mobile banking
Source: FinScope Nigeria 2008 conducted.
Bank Accounts: Savings accounts have the highest usage rate with 92
percent of bank clients reporting having a savings account. Of these, 37
percent hold current accounts, while 11 percent hold fixed deposit accounts.
The major deterrents to opening bank accounts include lack of funds for the
minimum balance, irregular income and distance from a bank location. Some banks
allow customers to open an account for as relatively small initial balances
such as NGN 1,000-2,000 (US$ 6-13)
Savings: Sixty-seven percent of adults currently have some form
of savings.
Approximately 55 percent of savers save primarily at
home or with a savings club.
The highest motivation for savings is to prepare for
emergencies.
Loans: Only seven percent of adults have bank, NGO or MFB
loans while 18 percent of adults have credit facilities at a shop or kiosk. Fifty-three
percent of borrowers plan to use the funds to start or expand a business.
The main reasons Nigerian SMEs give for not applying
for loans are:
· Cumbersome application procedures
· High interest rates
· Inaccessible collateral requirements
· Loan terms (maturities) are much shorter
than what companies require
SME Finance
Only 5 percent of SMEs have access to a loan, and 59
percent report difficulties accessing financial services. Given the potential
that SMEs have in boosting growth and employment,
Nigeria can gain substantially from removing
bottlenecks to their growth. A 2008 World Bank Investment Climate Assessment
(ICA) study identifies the top constraints of SMEs as the electricity shortage,
low access to finance and a poor transportation network. Such constraints add
considerably to the cost of doing business – an estimated 16 percent loss in
sales per year.
SME finance is constrained by lack of data,
regulations and infrastructure for collateral and insufficient credit
information. Policy making for the sector is severely constrained by the lack of
data that would allow a better understanding of the problems and performance of
ongoing initiatives.
Regulations require loans to be collateralized and
limit the types of acceptable
collateral. At the same time the laws relating to
security over movables (i.e., equipment) are antiquated, fragmented and do not
offer Nigerian businesses an effective means of raising capital.
Financial providers are challenged to offer adequate
services to SMEs. Checks, which are normally used as security in supplier
credit (particularly in developing nations), have a very bad reputation in
Nigeria. As a result, checks are not considered reliable and hence do not
function as credit or collateral.
Collateral is a
real deterrent for applying for credit, since every loan of over NGN 10 million
must be collateralized (per CBN regulation) with land or buildings and smaller loans
generally also require some form of collateral (per market practice). SMEs report
that unacceptable collateral or co-signers are the most likely reason (over 50%
of firms) for rejection of their loan application. Please kindly visit the website below if you are in Nigeria to access your loan NOTE: IN CASE YOU NEED A BUSINESS PLAN THAT CAN ACCESS FUND DONT HESITATE TO CALL ME ON 2348062269073.
Others
Bank of Industry { BOI}
Country Women Association of Nigeria {COWAN}
Development Exchange Center www.dexcentre.org
Equipment Leasing Association of Nigeria www.elannigeria.org
Farmers Development Union {FADU}
Small and Medium Enterprises Development Agency of
Nigeria {SMEDAN}
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