How we’re developing SMEs in Bayelsa —Eradiri

The Director-General of the Bayelsa State Micro-Finance and Enterprises Development Agency, Ebiekure Jasper Eradiri, who is also a member of the World Association for Small and Medium Enterprises in this interview with Austin Ebipade in Yenagoa, speaks on how the agency is growing the SMEs in the state, among other issues.

With the country in a recession, growing SMEs could stimulate the economy. What is your office doing to assist in empowering the SMEs in the state towards stabilising the economy?

The Bayelsa State government established the State Micro Finance and Enterprise Development Agency to midwife and promote the SME in the state, it was established by law in April, 30 2014 since then it has kicked the ground running, my predecessor carried out various schemes giving loans to women cooperatives in the state; and to stimulate the economy Government established the Izon-Ibe Micro-Finance Bank (IMFB) not just in Yenagoa, the state capital but in all the local government areas of the state.

We have carried out seminars for enterprises; we have also deepened access to finance by giving single digit loan support to SMEs in Bayelsa.

How did government raise the fund to finance the agency?

The Bayelsa State Government key into the Central Bank of Nigeria (CBN) window for the N2bn Micro Small and Medium Enterprise Development Fund MSMEDF and it has accessed over N1.5bn and Bayelsans are accessing the loan at a single digit interest of two per cent.

We have who open window with Bank of Industry (BoI) for another N2 billion loan scheme and other international agencies, as well as collaboration with industrial donor agencies. Therefore, the agency is working in line with its mandate to develop and promote the SMEs development sector in the state and that in our vehicle to stabilise the economy, by creating wealth, jobs, and also birth prosperity and economic development in Bayelsa.

Who are the beneficiaries of the loans, are women inclusive?

So far women entrepreneurs are the highest beneficiaries of the loans at 60per cent , this is because they are industrious and they have been able to repay their loans on time, others are cottage industries, agric entrepreneurs, not political or briefcase farmers, operators barbing saloons, fryers of bean cake (Akara). Similarly, beneficiaries must be mustered in an identified group of association, more so, repayment made on time would attract 40 per cent rebate.

At what percentage did government access the loan?

The Bayelsa State government access the loan from CBN at 20 per cent and land to the agency at nine per cent and through the Participating Financial Institutions (PFIs) such as Equator Micro-Finance Bank, Num Micro Finance Bank, Crystabel Micro-Finance Bank, Izon-Ibe Micro-Finance Bank, the loans are given single digit interest and that in the best any borrower can get and enjoy.

But how do you identify the real enterprises, because loans of this magnitude are usually diverted to acquire properties and many wives till date?

What we did since government conceptualized the programme is that we opened a data base and we have continued to check viability of business organizations. As I speak, we are in touch with NASI, NASME, YECCLMA and others. We believe our spread in germane enough to know the real enterprises, also we have our evaluation team consistently monitoring and assessing funding gap before approving release of funds (loans), and we believe that with what we have put in place we will be able to take care of that.

Also the Know Your Customer approach (KYC) in also in operation, the business organization that are borrowing are known, therefore members would urged those supported to use the money for what it is meant for, because a default by a member would bring disrepute to the entire cooperative he or she belong and when that happens the member would be blacklisted and the entire cooperative would be affected, and once blacklisted they won’t be able to access our facility and with this approach in place we are sure the loan collected won’t be abused and only genuine people in business would get loan from us. However, most importantly is that those that have collected loan are able to repay.

You said that the loan is with single digit interest, in some areas borrowers shy away from the facility because there are cases where Participating Financial Institutions (PFIs) were accused of adding to the interest, how would you deal with this?

The single digit is the lowest in the country and borrowers have nothing to be afraid of, but to take advantage of the loan facility. Also, for us the least collateral is the presentation of a guarantor. On the possibility of PFI adding to the interest, we are closely monitoring their operation and if they do otherwise we will ensure that the CBN sanction them for that infraction.

If the loan is not repaid it would be difficult for the state to access fund from the CBN, how does your agency mount pressure on borrowers to pay back loan collected?

We pass through the PFIs, such as cooperative finance agencies and we still apply the KYC approach, so that is we know where they are doing their business in collaboration with the banks. We mount pressure on the banks and they in turn mount pressure on the borrowers. At most in two weeks we make sure the bank is able to collect funds from borrowers and we in turn send it to a particular account and so far response and repayment has been satisfactory.

The population of Bayelsans living in the upland area is 20 per cent, while 80 per cent resides in the coastal communities, what is your agency doing to step down the information to the grassroots?

We rely on the media, through publicity on TV, radio and newspapers. We also organize town hall meetings with the coastal people, while we also give room for feedback from the approach. Our technical team also visit the communities to know how the banks are treating borrowers (enterprise) to ensure they (the banks) are not been untoward to them.

We also go to grass roots on selective basis with schedule team to the eight local government areas of the state. I can feel you that over 60 per cent beneficiaries are from the communities; we are interested in knowing all participants in the scheme because our major mandate is to grow the MSME sector.

So far in the onerous task of growing the economy in Bayelsa, what are the challenges before your office?

On a general notes, we would always have challenges, but what is important is that we devise strategies to rise above our challenges well, it is a big challenge to access another tranche loans from the CBN if we are unable to recover at most 70 per cent  returns, and that is why we push through to ensure, borrowers repay on time, Similarly, another challenge is recommendation from top government functionaries to the banks for loans, most times these persons see the money as grant and not loan to be repaid.

It was for that reason we do hold periodic stakeholders meeting comprising the three arms of government.Consciously, this is done to educate our stakeholders and the public that the fund is not grant but loans borrowed to be repaid. However the most important thing is that we are achieving our mandate for the state government.

Does your agency synergise with other related government ministries, agencies and departments?

Well, by our mandate we work closely with ministries of agriculture, trade/Industries, Women affairs, Youths Affairs, budget and Finance, more so, our work is such that we achieve greater success if we don’t work at cross purpose, so we work in synergy and we have kept very close relationship and so we have been delivering on our assignment.