BusinessDay... the voice of business: LCCI calls for Credit Guarantee Scheme for SMEs

LCCI calls for Credit Guarantee Scheme for SMEs
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Francis Jakpor on 13 May, 2008 02:00:00
 
Lagos Chamber of Commerce and Industry (LCCI) Thursday called for a Credit
Guarantee Scheme to provide cover for Small and Medium Enterprises (SME’s).
Asiwaju Onofowokan, president of LCCI, said at a media briefing in Lagos
currently most of the small businesses patronise the informal markets where they
pay interest rates which are sometimes as high as 80 to 100 percent per annum.
There should be a credit scheme in place to give cover to the SMEs…this will
reduce the risk of lending by banks to SMEs…and improve their access to
credit.
“This idea was mooted… some years back but was not followed through. We
suggest that the policy be revisited and urgently implemented.”
In addition, Onofowokan suggested that the insurance companies be used as
guarantees for the SMEs to secure credit from banks. He said this would make
them more relevant to private sector development.”
The president added that LCCI  had no problem with the recent scrapping of the
Small and Medium Enterprises Equity Investment Scheme (SMEEIS) in favour of
microfinance banks, but suggested there should be guidelines to ensure funds
were properly channeled.