The Bank of Industry has said high cost of doing business and other challenges are major reasons why manufacturers lack access to financing options.
The Managing Director of the Bank of Industry, Olukayode Pitan, said this during thevAnnual General Meeting of the Apapa Branch of the Manufacturers Association of Nigeria.
Pitan, who was represented at the event by the bank’s Divisional Head, Large Enterprises, Isa Omagu, expressed concern that a significant fraction of the manufacturing industry did not have access to finance due to a wide range of factors.
According to him, other factors such as lack of credit history, non-availability of collateral, vulnerability to market fluctuations and the highly unstructured nature of many manufacturing entities also accounted for major reasons why many of them lacked access to finance.
He said, “High cost of doing business, that issue can never be overflogged. That is one of the biggest problems of manufacturers. For manufacturers to improve their access to finance, they have to ensure that they keep proper records. They need to do proper bookkeeping to make themselves more bankable.”
He advised businesses to increase efforts to improve business and technical knowledge in order to improve their chances of accessing finance.
In its Bi-Annual Economic Review, the Manufacturers Association of Nigeria had identified lack of access to funding as a major factor that had stunted the growth of the industry.
MAN lamented that commercial bank lending rate to the industries was grossly influenced by the incessant increase in Monetary Policy rate, in quest to maintain an appreciable real interest in order to attract foreign investment inflow.
While speaking in an exclusive interview with The PUNCH, the President of the Manufacturers Association of Nigeria, Francis Meshioye, expressed worry that manufacturers were beginning to downsize, while others were divesting away from Nigeria.
According to him, the recent increase in the Monetary Policy Rate, coupled with the forex crisis that had trailed the floating of the naira, had made life increasingly hard for manufacturers.
He said, “We plead with the government to look at the manufacturing sector as a sector that requires special attention because the success of the manufacturing sector will boost economic growth tremendously. It will boost the economy because we will be able to produce much more goods. We will be able to spend less on importation of goods.
“This will relieve us of the foreign exchange that we are looking for. The real sector is suffering a lot. Companies are reducing their size. Some are divesting from Nigeria. If this continues, we will become an endangered sector.”
