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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Financing small and medium-scale enterprises in Nigeria: recent policy initiatives and the needed paradigm shifts
Author:Toby, Adolphus J.
Periodical:African Administrative Studies (ISSN 0007-9588)
Geographic term:Nigeria
Subjects:small enterprises
business financing
Abstract:For small and medium-scale enterprises (SMEs) in Nigeria to serve as catalyst in rapid industrialization, there is need for improved and more innovative access to development finance that would address the inability of SMEs to provide collateral securities for loans from formal credit institutions. The present article provides an overview of past government initiatives in financing SMEs in Nigeria, looks at the critical role of banking institutions and appraises recent policy initiatives, notably the Small and Medium Industries Equity Investment Scheme (SMIEIS) and the Small and Medium Enterprises Credit Guarantee Scheme (SMECGS). It shows that most banks, with the exception of the Bank of Industry, continue to shy away from SME financing, possibly as a result of a growing risk aversion and the poor financial track record of SMEs. The current policy approach is fragmented and does not provide any stimulus for the organized private sector take the lead in SME financing. There is need for a paradigm shift to a holistic approach with optimum interfacing of government guarantees, private equity and venture capitalism and appropriate tax incentives. App., bibliogr., ref., sum. [ASC Leiden abstract]