Why SMIs should be supported - Borodo
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According to Bashir Borodo, president, Manufacturers Association of Nigeria (MAN), SMIs also provide a vehicle for reducing income disparity, develop a pool of skilled and semi skilled workers as a basis for future industrial expansion, improve forward and backward linkages between economically, socially and geographically diverse sectors of the economy, provide opportunities for developing and adapting appropriate technological approaches, offer an excellent breeding ground for entrepreneurial and managerial talent, the critical shortage of which is often a great handicap to economic development, amongst others.
The MAN president who spoke at a recent forum in Lagos on SME financing recalled that prior to the 19th century, cottage industries mostly small and medium scale businesses controlled the economy of Europe. The industrial revolution changed the status quo and introduced mass production.
“The twin oil shocks during the 1970s undermined the mass production model, which triggered unexpected re-appraisals of the role and importance of small and medium sized enterprises in the global economy. Findings by economists over the years show that small firms and entrepreneurships play a much more important role in economic growth and development.”
Speaking on the challenges of small and medium businesses, he noted that in most developing countries, Nigeria inclusive, small business enterprises are not very attractive prospects for banks, as they want to minimise their risk portfolio.
This was confirmed during a symposium in 2007 held in Tanzania jointly organised by UNDP/Technonet Africa. The symposium identified finance as a major hindrance for the development of SMEs, particularly in Africa.
Though some measures like the Small and Medium Industries Equity Investment Scheme (SMIEIS) and Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) have been created to support the SMEs, Borodo believes a lot still needs to be done to sustain their operations.
The MAN president who spoke at a recent forum in Lagos on SME financing recalled that prior to the 19th century, cottage industries mostly small and medium scale businesses controlled the economy of Europe. The industrial revolution changed the status quo and introduced mass production.
“The twin oil shocks during the 1970s undermined the mass production model, which triggered unexpected re-appraisals of the role and importance of small and medium sized enterprises in the global economy. Findings by economists over the years show that small firms and entrepreneurships play a much more important role in economic growth and development.”
Speaking on the challenges of small and medium businesses, he noted that in most developing countries, Nigeria inclusive, small business enterprises are not very attractive prospects for banks, as they want to minimise their risk portfolio.
This was confirmed during a symposium in 2007 held in Tanzania jointly organised by UNDP/Technonet Africa. The symposium identified finance as a major hindrance for the development of SMEs, particularly in Africa.
Though some measures like the Small and Medium Industries Equity Investment Scheme (SMIEIS) and Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) have been created to support the SMEs, Borodo believes a lot still needs to be done to sustain their operations.
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