A chartered stockbroker and banker, and an authorised dealer on the Nigeria Stock Exchange floor, Mr. Wemi Jones, has said for the country to see desired development in the economy, a Small and Medium Enterprise Fund must be established.

He noted that the fund must have a single-digit interest rate arrangement for borrowers.

Jones said the peculiar nature of the country’s business environment required a conscious and strategic approach to distort the status quo and give the economy the needed boost, especially now that it had gradually exited recession.

He said the Nigerian banking industry had really grown and commended some policies of the different Central Bank of Nigeria governors.

But he stressed that more should be done to impact on the businesses of various SMEs in the country, so that major positive economic impact could be felt.

According to him, the current interest rate regime in most commercial  banks for SMEs only leaves the SMEs to struggle all through, with little or nothing to show for their efforts over the years.

He said, “In the past, banks were very small and there was a proliferation of banks prior to consolidation in the industry. Now, banks are stronger and more stable; and should be able to do more as far as the SMEs are concerned.

“But the Nigerian banks are not as supportive to small businesses as they ought to be. Some show interest when they see that the business you are proposing has the propensity to repay the loan being applied for. The banks can still do a lot better.

“Banks are very attracted to short-term financing at the expense of long term, and such disposition cannot do much to turn the economy around positively and guaranty meaningful development. In Nigeria now, the bank are doing so well while the companies, which are giving the banks business, are not doing well. That means there is a fundamental problem”

Rising overheads in most of these companies, according to Jones, is the major reason why they are not doing well; of which the overheads include diesel, security, tax expenses, among others.

Jones, who runs Ibietan Farms Limited (an integrated farm located in Aiyede, Kabba/Bunu Local Government Area), said about 50 per cent of his firm’s overhead was on diesel.

For businesses in Lagos, he said because of the current situation at Apapa, the price of diesel had gone up; not due to scarcity of the product, but because trucks could not access the points of loading.

He said, “Some businesses can close down if this situation lingers for another three months or less. Margins of businesses are being eroded by these rising overheads.  Also, multiple taxation is causing our running costs to rise as all kinds of tax are levied against businesses amid challenges they are being confronted with.”