The Central Bank of Nigeria (CBN), in pursuit of its objective of promoting economic development, in recognition of the significant contributions that Micro, Small and Medium Enterprises (MSMEs) are making to the growth of the economy, has been launching a growing range of initiatives aimed at addressing the financing gap in this sub-sector.

The CBN, in line with its pivotal role in the nation’s financial ecosystem, launched the Micro, Small and Medium Enterprises Development Fund (MSMEDF) on August 15, 2013 with a share capital of N220 billion. The Fund aims to enhance the access of MSMEs to financial services, by channelling single-digit loans at Nine percent interest rate to them, through the Primary Finance Institutions (PFIs).

Amidst cries that end users are finding it impossible to access this facility, one reason being the shortage of collateral among Small Business Owners, the CBN introduced the National Collateral Registry (NCR), to ease delivery of affordable loans to small businesses. Initiated in 2015, a movable asset in this register, with the Bank Verification Number (BVN) of the potential borrower, is expected to stand as collateral for a loan to a Small Business Owner.

Granted that bank executives and fund managers would rather not lend to Micro, Small and Medium Enterprises, because they are high-risk borrowers, this CBN-inspired NCR scheme provides a window for mitigating the risks of lending to them.

In yet another initiative, announced in December 2018, the CBN decided to transform the tottering Nigerian Postal Service (NIPOST) into a National Microfinance Bank.

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