NAN-HE-10
SMEs
By Chinyere Bassey
Lagos, Oct. 19, 2017 ( NAN) The International Labour Organisation (ILO) has expressed concern that Small and Medium Enterprises (SMEs) which play a crucial role in creating jobs, often lack access to bank loans.
Deborah Greenfield, ILO Deputy Director General, said in Lagos on Thursday that SMEs found it difficult to get bank loans and when they got, they did so at comparatively high rates.
Greenfield, however, said this was because SMEs lacked audited financial statements, repayment history and business assets for use as collateral.
“Bank loans can help firms improve job quality and productivity but are often difficult to get for SMEs.
“Policy-makers should look into ways to make it easier for SMEs to access such external funding for it to benefit workers and employers.’’ Greenfield said.
She said that government at all levels should promote the channeling of venture capital to SMEs, and put other support measures in place to enhance creative economy.
“The measures include tax reductions and crowd funding for start-ups, facilitation of mergers and acquisitions for enterprises in the development and promotion of reinvestment for more mature firms,’’ she said.
She said research carried out a month ago showed that firms were more likely to make greater use of bank loans for working capital in countries which had stronger creditor rights protection.
The ILO deputy director general said that countries that had also addressed issues such as poor accountability, lack of respect for the rule of law and corruption, made use of financial support.
She however said that some innovative practices had proven beneficial in allowing firms to access additional capital for growth while supporting vulnerable groups and broader social and environmental issues.
Greenfield advised that countries should create financial instrument that would prioritise groups, such as women, migrants and the unemployed.
She said that such groups were generally excluded from financial services due to their lack of credit history or scant equity. (NAN)
CHIN/FF/EMO
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Edited by Fela Fashoro/Ejike Obeta