MfB bemoans lack of access to N220bn MSMEs intervention fund

The Head, Credit Department, Umuchinemere Pro-credit Micro Finance Bank(UPMfB), Mr. Charles Udeani, has decried the politicisation of the Federal Government’s N220 billion Micro, Small and Medium Enterprises (MSMEs) Development Fund, identifying it as a major impediment to achieving the goals of the fund.

Speaking on behalf of microfinance operators in the country, he stated that politicisation of the fund allowed many people, mainly politicians who are not in business, to use their influence in accessing it, thereby, refusing to repay since 2014 when the fund was introduced.

This, he said, has resulted to the large scale delinquency witnessed in the performance of this fund and impeding the achievement of the objectives of establishing the Special Purpose Vehicle(SPV).

Udeani noted that initially because of this lapse, many people saw the fund as a largesse meant for political patronage, with the 2015 general elections around the corner then.

“They rushed and benefitted from the fund, with many refusing to repay, claiming it was a political largesse, while many others simply collected and later vanished from their former places of domicile till date,” he lamented.

Udeani said the delinquency in the performance of the fund was adversely affecting the realisation of the poverty reduction objective and the revolving policy of the Fund, a development, he said, is injurious to the economic health and growth of the country, since ‘the loan which had one year tenure was meant to encourage entrepreneurship and reduce poverty in the country.’

UP MfB had earlier participated in the disbursement of the MSME special development Fund. The bank disbursed N182.7 million to 553 beneficiaries, with 314 male beneficiaries receiving N91.5 million and 239 females receiving N91.2 million between 2014 when the fund was launched and the first quarter of 2015.

Some of the bad experiences in the fund’s disbursement, Udeani observed, were that “People also erroneously believed that the Fund was their national cake, as well as a campaign largesse by the then outgoing administration and not meant to be repaired, leading to the difficulty in recovery of the fund, as some beneficiaries are reluctant to repay, while some others are at large.”

He, however, explained that the fund actually helped most of the beneficiaries to either establish or grow their businesses and that it was encouraging.