The Small and Medium Enterprises Development Agency (SMEDAN), on Tuesday signed a Memorandum of Understanding (MoU) with three companies to develop Small and Medium Enterprises (SMEs).
This according to the agency will be done through crowdfunding, cashless services and insurance.
The companies are TKFOL Financial Technology, MRAMINI Electronic Insurance and MRPAYFORME for financial technology Limited.
Speaking during the signing of the MoU in Abuja, the Director-General of SMEDAN, Dr Dikko Radda, said that the concept would enable SMEs have easy access to funds.
Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture.
Represented by Mr Wale Fasanya, Director, Planning, Monitoring and Evaluation in the agency, Dikko described crowdfunding as a welcome development.
While decrying difficulties faced by business owners to access funds from banks, Dikko urged SMEs to explore the opportunity provided by the services of the companies to grow their businesses.
According to him, many SMEs around the world are finding it difficult to access funds from banks and Nigeria is not an exception.
“Our own is even more precarious, because of the risk involved most banks do not want to touch the micro businesses.
“It may not be so for small businesses and the medium ones but for micro businesses which we have in large numbers, it has been difficult for them to access funds from the banks.
“The issue of crowdfunding is very important to our businesses in Nigeria, especially micro businesses and now we have another category of businesses we call NANO in Nigeria.
“I think with what you are putting in place, our micro businesses will benefit largely from this,” Radda said.
The SMEDAN boss also said that the MoU would take care of the issue of insurance for businesses.
“This can take care of some of the risks that are involved.
“It is a welcome idea and the issue of cashless services through one of the MoUs will also benefit a lot of our MSMEs,” he added.
He urged the companies to swing into action to ensure that the objectives of the MoU were implemented.
According to Radda, I believe that immediately after signing this MoU, we will start seeing actions and we will be able to see what has been achieved through the MoU.
Mr Ismail Abdullahi, Management Representative of the companies said that the agreement would enable SMEs in the country to start accessing alternate financing through their services.
Abdullahi said that accessibility to cashless payment services to be rendered by the companies would contribute immensely in the growth of SMEs in the country.