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Tuesday,
February 23, 2021 / 10:00AM / Ottoabasi Abasiekong for WebTV / Header Image Credit: Centre for Financial Inclusion
With
over 40m Micro, Small and Medium Enterprises (MSMEs) in Nigeria a major
challenge remains access to finance at affordable rates. Mr. Franklin Odoemenam
the Managing Director of Fragg Investment Management made this point while
discussing the subject "Improving Financing for MSMEs Through the Nigerian
Capital Market".
According
to Odoemenam MSMEs can through the capital market access capital formation
through equity and bonds, to scale their operations and create value in the
economy. To this effect he said Fragg Investment Management, was exploring a
partnership with the Nigeria Stock Exchange (NSE) to support MSMEs.
Speaking
further he noted that companies who access the market, may secure capital at a
favourable coupon rate with no requirement for collateral.
He identified the following primary challenges that MSMEs experience in Nigeria when it comes to financing;
Looking
at the dynamics of financing and support for MSMEs, Mr. Odoemenam stressed that
with the global shift to sustainable development, the quest for companies to
become ESG (Environment, Social and Governance) compliant has become a key
requirement for accessing impact investments.
He
acknowledged the various interventions from the Central Bank of Nigeria (CBN),
Bank of Industry (BOI) and Development Bank of Nigeria (DBN) but stated that
there was still a huge gap in MSME financing.
The
investment consultant called for creative products and services from the
financial services industry and capital market to address the MSME
financing gap in Nigeria.
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