Smedan Introduces Loan without Collateral

Preparations are in top gear by the Small and Medium Enterprises Development Agency of Nigeria (Smedan) to set up a credit scheme that would be designed to give loans without collateral.
This is coming on the heels of planned partnership with relevant stakeholders with the aim of introducing functional credit guarantee scheme that will enable entrepreneurs access funds without collateral.
Alhaji Mohammad Umar, director-general, SMEDAN gave this hint recently in Abuja, saying that the scheme, which might not be domiciled in SMEDAN, would ensure that Small and Medium Entrepreneurs (SMEs) accessed credit facilities without the usual difficult conditions.
According to him, “the agency is discussing with stakeholders on the implementation of the scheme. It may start with the public sector support, and will then involve the private sector, which will eventually drive the scheme.”
“Without cheaper funds, the SMEs cannot grow. Many countries have their credit guarantee schemes which they use to support the growth of their small businesses.”
Umar noted that some of the stakeholders listed for discussion on the scheme included the CBN, Ministry of Commerce and Industry and the Nigerian Association of Commerce and Industry, Mines and Agriculture (NACCIMA).
Before the fund is floated, strategies would be put in place to avoid cases of default and non-performing loans with the view of limiting a possible growth of toxic assets, sources added.