In a bid to foster economic growth and empower small businesses, Rivers State Governor, Sir. Siminalayi Fubara, recently unveiled a groundbreaking N4 billion loan scheme. The initiative is a collaboration with the Bank of Industry (BOI). The programme aims to breathe life into the entrepreneurial dreams of business owners across the 23 local government areas in the State. This includes non-indigenes.
The event held at the prestigious Dr. Obi Wali International Conference Centre in Port Harcourt on Friday. It marked the beginning of a transformative journey for nano, micro, small and medium-scale enterprises (NMSMEs). Over 3,000 businesses are set to benefit from this scheme. Their estimated value is in excess of N3.6 billion. The impact promises to reverberate throughout the entire State and beyond.
Governor Fubara recalled his promise of unwavering support for entrepreneurial development during his election campaign. He recognized the vital role access to credit plays in business growth. He vowed to champion the cause of small business owners by providing much-needed financial assistance in the form of soft loans. The launch of this loan scheme signifies a significant step towards fulfilling that pledge.
Beyond the immediate injection of funds into businesses, the ripple effect of this initiative is expected to be profound. Governor Fubara expressed optimism that the enterprises will flourish. His expectations of their contribution to the economic landscape of Rivers State in multifaceted ways is very high. This includes boosting the gross domestic product (GDP), generating employment opportunities and increasing tax revenue. The potential benefits are far-reaching and impactful.
At the heart of this endeavor lies a powerful collaboration between the Bank of Industry (BOI) and the Rivers State Government. The Managing Director/Chief Executive Officer of BOI, Dr. Olasupo Olusi expressed the shared vision. A future where socio-economic growth is not a possibility but a reality. By providing the necessary financial support and resources, financial empowerment is just the beginning. Social vices will be curbed. Overall, it will nurture a thriving business ecosystem. In his view, this will drive the State’s economic engine forward. Dr Olusi was represented at the event by the Executive Director of Corporate Services and Commercial, Mr. Usen Effiong.
BOI and Rivers State Joining Forces
It’s good to see Rivers State teaming up with BOI to support entrepreneurs. There’s a misconception that the rich don’t know the “value of money”, since it’s in abundant supply. The State is said to be drowning in oil. After all, it’s 2nd only to Lagos in internally generated revenue (IGR). They want more. But are willing to support wealth creation for the people first.
BOI on its part is fulfilling part of its mandate. Deploying finance in a creative way is what development finance institutions like BOI do. Co-financing projects in collaboration with strategic partners. Whether it’s for a key capital project or as an intervention of some sort. An intervention targeted at small business owners is especially welcome.
The partner (Rivers State Government in this instance) provides matching funds based on an agreement. The interest rate will not exceed 10% and single obligor limit is N50 million. In case you missed it, the Central Bank’s monetary policy rate (MPR) is now 24.75%. Make inquiries from your bank on current lending rates and you’ll understand my excitement. Entrepreneurs are my favourite group of people. Next only to my beloved small holder farmers of course!
Wrapping Things Up
This model works wonders when done right. Sure there will be various other economic factors that’ll determine its success rate. But it’s scientifically tested, proven and documented. Even in our beloved country. Conversely, some studies have also shown that commercial bank loans to SMEs do more harm than good.
My take? The effects or impact of any loan to a business or individual depends on its management. I’ve analyzed enough loans to make a case for or against them. Regardless of the pricing, make sure you actually need it to achieve your business or personal goals. Use it only as leverage. Write your business plan. Do your calculations and projections. Make sure you can repay it within the stated tenor. Have a plan B (and C, D or E if possible).
Kudos to the Governor for keeping an election promise.
