Date: 2016-11-20

For onward economic development, no country ever downplays the integral role of the Small and Medium Enterprises (SMEs). Governments, everywhere, leverage their potentials to achieve sustainable socio-economic development and prosperity.

In Nigeria, however, there has been a gross under-performance of SMEs, which has reflected adversely on the economic development. The poor contribution of SMEs to the national Gross Domestic Product (GDP) of the country is not unconnected to the shortfalls of infrastructural facilities, management skills, unfavourable government policies and low technological advancement, among others.

But of all these challenges, problem of financing is de facto. Many potential entrepreneurs lack access to capital hence the natural death of the ideas and the businesses. Worst-case scenario – an empty belly does not favour an entrepreneurial brain.

Perturbed by this ugly trend, the Kwara State Governor, Alhaji Abdulfatah Ahmed in March 2012 launched the Kwara Micro Credit Intervention Scheme to encourage and assist SMEs in the State. The scheme allows new and existing small businesses to bid for funds to establish or expand their businesses.

To kick-start the scheme, the governor approved an initial sum of N250 million, which was domiciled in the State Ministry of Commerce and Cooperatives.

Objectively, the scheme is to provide financial support to small business owners who lack access to funds to grow their businesses. It aims, by and large, to stimulate commerce, trade and economy at the local level in the State. Considerably, the State government had spent a cumulative of over N1.9 billion on the micro credit intervention scheme since it began in 2012, and about 2000 cooperative societies across the State had so far benefited from the intervention scheme.

At this point, it is pertinent to note that the target beneficiaries of the scheme include men and women who have existing businesses, youth with workable business ideas or requisite skills, enterprising women in the rural areas and cooperative societies with traceable business records.

Consequently, over 160 farmers' associations across the State with not less than five farmers each had benefited from the micro-credit funding under the Off Taker Demand Driven Agriculture Scheme of the state government. How are funds disbursed?

The disbursement of funds to beneficiaries is done through selected micro finance banks located within the operating environments of the target beneficiaries.

The participating micro-finance banks are referred to as partnering banks. Through their various staff, the banks have personal interactions with the beneficiaries to determine the prospects of their businesses or ideas. The banks are also in a better position to properly appraise and monitor the beneficiaries and ultimately recover such disbursed funds as at when due.

Envisioned by Governor Ahmed, Kwara Micro Credit Intervention Scheme is a purely developmental programme fashioned to foster economic developments by easing business activities, unlocking hidden local potential and stimulating local economy as a first line catalyst to industrial growth.

Improving access to credit is crucial if SMEs are to reach their potential and allow businesses to move from start-ups to established businesses with growth potential in Nigeria as a whole. The SMEs sector, if properly developed has the capacity to contribute significantly to the economic advancement of a country.