The Nigeria Association of Small and Medium Enterprises (NASME) has called on the federal government to adopt a revolving fund mechanism for micro, small, and medium enterprises (MSMEs), arguing that the current one-off intervention funds are inadequate to address the sector’s long-term financing needs.
Speaking at a panel discussion during the 4th African Union MSMEs Forum, NASME President, Abdulrashid Yerima, emphasised the importance of sustainable funding structures for MSMEs. He said a revolving fund would ensure continuity by allowing new beneficiaries access to funding once previous recipients repay their loans.
“What we are advocating for is a revolving fund mechanism. Intervention funds should not be one-time disbursements. They should be structured in a way that ensures continuity, so that when one group benefits and repays, another group can also access the same opportunity,” Yerima stated.
While acknowledging that previous interventions by the government, particularly through the Bank of Industry (BOI), had yielded positive outcomes, Yerima stressed the need for a broader, long-term financing framework.
He proposed that Nigeria develop a national MSME financing strategy aligned with the country’s industrialization, trade, and employment goals.
According to him, such a strategy should integrate donor resources and public funds to attract increased private sector participation.
Yerima also commended the recent establishment of the Credit Guarantee Company, describing it as a timely and necessary initiative for de-risking lending to small businesses.
“The credit guarantee scheme is essential, especially as MSMEs are considered high-risk by conventional lenders. We believe that with appropriate support, these businesses can thrive and repay loans, making the fund sustainable,” he added.
In his remarks, Yerima urged financial institutions to simplify loan application processes and target critical sectors such as agriculture, manufacturing, and services.
He called for subsidized loan interest rates—ideally capped at three percent—as well as greater investment in capacity building to bolster MSME resilience.
He further advocated for the development of cross-border financing instruments to support MSMEs participating in trade under the African Continental Free Trade Area (AfCFTA).
“We are engaging with other SME associations across ECOWAS and beyond to ensure that African MSMEs are not left behind in the drive for regional integration and trade,” he said.