SBA-Guaranteed Loans


What It Is: Term loans from a bank or commercial lending institution...
Read More...

SME

SME in Nigeria
Read More...

What Government should do

Much is expected from the government to provide basic and infrastructural facilities to assist...
Read More...

The SME factor: A case study of Nigerian and Chinese investment relations

The automobile parts cluster in Nnewi (Nigeria) is an example of the effect of SMES on the large...
Read More...

Suggestions for the SME problems

Since SMEs require in the pre and post stages finance, BDS providers could play a key role in...
Read More...

Eligible SMEs

Any business activities that do not fall among the specifications above and meets the following...
Read More...

Activities Covered by SMIEIS

As is the practice everywhere and Central Bank stipulation coupled with the agreement reached...
Read More...

Challenges and Constraints of Funding SMIEIS Operations in Nigeria

Specifically in Nigeria the scheme is still very young,2001, such that there are many challenges...
Read More...

Small and medium industries Equity Investment Scheme (SMIEIS)

The Banker’s Committee is a body constituted by representatives of banks in Nigeria. The scheme...
Read More...

Problems of SMEs in the Nigerian Economy

  Inadequate and inefficient infrastructural facilities, which tend to escalate costs of operation...
Read More...
  • 1
  • 2

Challenges and Constraints of Funding SMIEIS Operations in Nigeria

Specifically in Nigeria the scheme is still very young,2001, such that there are many challenges faced by the banks. This requires proper strategies before the administration of SMIEIS can be successful. Some of the these problems are :

  • Limited number of attractive investment opportunities due to stagnant economy and lack of enabling environment for businesses.
  • Public sector domination, inadequate infrastructure and attendant high cost of doing business, and unstable/inconsistent macro-economic policies. 

  • Public sector domination, inadequate infrastructure and attendant high cost of doing business, and unstable/inconsistent macro-economic policies.
  • Lack  of reliable information on industries which make investment opportunities not obvious.
  • Inability of entrepreneurs to articulate business plans due to lack of sophistication and skills.
  • Low level of management and technical competence. Unwillingness of entrepreneurs to dilute holdings preferring ‘a big fish in a little pond’ rather than being ‘a smaller piece of a much larger pie’
  • Low level of management and technical competence. Unwillingness of entrepreneurs to dilute holdings preferring ‘a big fish in a little pond’ rather than being ‘a smaller piece of a much larger pie’
  • The ‘National cake’ mindset, which made most of the entrepreneurs to go to the banks unprepared for the scrutiny the SMIEIS scheme entails.
  • Low awareness standard terms to private equity investing
  • Lack of effective judicial administration system.
  • The banks are still not aware if the protection clauses for strong governance rights in share holding agreements will be enforceable
  • There is the problem of valuation of businesses.
  • Due to lack of reliable financial information or meaningful financial projections,limited financial skill and industry data for valuations; entrepreneur’s ignorance of subject, negotiations tend to be long drawn; and lack reliable data to base macro-assumptions.
  • Obtaining sufficient information from the potential inventor companies during the diligence is time consuming due to lack of adequate records and/or documented procedures
  • Entrepreneurs are reluctant for the bank to monitor its business in an ongoing basis thus hindering value enhancement
  • And other successful in bringing a business into operation may not be able to take the business to the next level of expansion and growth, and thus need additional support to ensure overall success of the business

STATISTICS

  • Insufficient personal savings/funds resulting in low initial promoters equity
  • Uncoordinated business ideas and plans.Non bankable projects by entrepreneurs
  • Inability of the customers (SMEs) to satisfy highcredit risk standards, including security/collateral.Inability of banks to provide long term funds due to mismatch between tenor of bank deposits and loans being sought
  • Volatile exchange rate regime
  • Fluctuating and prohibitive interest regime·

Shopping Cart

Your cart is empty

E-Books Cart

The cart is empty

The Book

Success in your business book
by Peter Osalor is out

TV Series

View videos

Join Entrepreneurial Revolution