– Senate President, Dr Bukola Saraki has never hidden his passion for small businesses in Nigeria
– A new law was recently passed to strengthen Micro, Small and Medium-sized Enterprises (MSME’s)
– The Senate President is determined to ensure that with the new law, small business can compete favourably in the business environment
Nigeria’s Senate President, Dr Bukola Saraki has said the new legislations, Secured Transactions in Movable Assets Act and the Credit Reporting Act passed by the National Assembly in June and and signed into law by then Acting President Yemi Osinbajo will support the growth of MSME’s in Nigeria.
The Senate President stated that this will be possible through increased bank lending and reduce bank exposure to loan defaults through pre-examination of credit worthiness for would be borrowers.
ZENITHBLOG.com gathered that under the law, potential borrowers can now register assets other than land and property as collateral to secure a loan from banks.
Saraki has always advocated for the development of small businesses in Nigeria. Photo credit: Nigerian Senate
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Securing financing through loans has long been a problem for Nigerian entrepreneurs in the past as most MSME owners rely on personal savings or loans from family and friends to launch their business ventures.
The new law, also known as the Collateral Registry Act, allows banks to increase lending to MSME’s, while not negatively impacting their balance sheets.
Saraki who hailed the passage and the opportunity for economic and MSME growth the new laws afford Nigerians stated that “this is a win-win situation for our economy and society”.
He continued:“The private sector, the federal government and the National Assembly worked together to create the enabling environment for MSME’s to grow, diversify the economy and increase employment.
“We should all be proud of delivering a law that will allow many people to provide for their families and community.”
The Credit Reporting Act,
Under the Act, companies will have access to the credit history to review whether there is a history of loan defaults or other financial blemishes. This extra layer of protection will serve to reduce lending risks, while preserving credit services to borrowers with good credit histories.
“Combined, the new laws make good economic and business sense. Already bank lending to MSME’s has increased and is expected to grow considerably for the remainder of the year and in 2018.”
“In both developed and developing economies small business growth is the engine of the economy and employment growth. With a high unemployment in Nigeria, the growth and support for MSME’s is critical.
“The National Assembly will also be looking to see what existing support programmes are working and can be created to help MSME owners to better understand the use of credit, management skills training, mentor relationships, marketing and how to pursue government procurement contracts” Saraki added.
Meanwhile, the federal government has kick-started plans to establish a public beneficial ownership register.
In a meeting held on Wednesday, September 6 in Abuja, key agencies of the government fine-tuned strategies for the implementation of the policy.
The meeting which was held under the auspices of the Open Government Partnership (OGP) had in attendance the representatives of the Nigerian Extractive Industries Transparency Initiative (NEITI), the Corporate Affairs Commission (CAC), the Bureau for Public Enterprises (BPE), the Security and Exchange Commission (SEC), the Federal Ministry of Justice, Civil Society Organisations amongst others.
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Source: Zenithblog.com
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