The Lagos Chamber of Commerce and Industry and the newly licensed Empire Trust Microfinance Bank have expressed optimism that the opening of more microfinance banks in the country would enhance access to finance for the Small and Medium Enterprises.
The President of LCCI, Alhaji Remi Bello, who spoke at the opening of the ETMB, stressed the importance of access to finance in the development of small businesses.
He said the chamber was happy with the promoters of the financial institution and would identify with any effort directed at boosting the activities of SMEs especially in the area of finance.
“Lack of access to credit by small and micro enterprises has been identified as a major reason for the growing level of poverty in many developing countries. This further underscores the crucial role of microfinance institutions in the economic growth and development process, especially in their service to small businesses,” he said.
Bello urged the ETMB to focus on entrepreneurs who were often denied access to financial services by the commercial banks on account of their inability to provide collateral for credit facilities.
“Microfinance banks have therefore become one of the reliable sources of financial services for small and micro enterprises. The promotion of microfinance in Nigeria is a key component of financial inclusion strategy of the CBN. The delivery of financial services at affordable costs to small businesses will also facilitate the attraction of large chunk of funds in the informal sector into the financial system and contribute to monetary policy effectiveness.
“The operational challenges of microfinance banks in Nigeria would still have to be contended with, which include liquidity shortcomings, monetary policy uncertainty, loan defaults, infrastructure issues and the lingering harsh business environment. We are happy that this limiting factor, notwithstanding, the ETMB has today joined the league of the many microfinance banks in Nigeria,” he added.
The Managing Director of ETMB, Mr. Seun Durojaye, said the emergence of the financial institution was a product of eight years study of the sub-sector, having been involved in other forms of businesses revolving around micro and small enterprises and financing.
SOURCE: Daily Independent (Nigeria)
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