By Franca Ofili
Mr Abdullahi Sulaiman, the Director-General, Jigawa Chamber of Commerce, Industry, Mines and Agriculture, has advised the Federal Government to introduce a guaranteed lending scheme to help small business owners.
Sulaiman told the News Agency of Nigeria (NAN) on Tuesday that such scheme could be used to address the current economic recession in the country.
“The government needs to introduce a guaranteed lending scheme to help small and medium scale but viable enterprises that are struggling to secure finance due to lack of acceptable collateral to secure loans.
“It can be done while guaranteeing repayment of the loans to the lending banks.
“Through these strategies, economic activities can be stimulated as a consequence of which the effect of the recession can be minimised or totally eliminated,’’ he said.
Sulaiman said that Nigeria could take advantage of the International Monetary Fund (IMF) concessionary facility to stimulate and increase in credit for production activities, such as in agriculture and mining.
Other activities are exploration and manufacturing that were releasable within the time frame of the facility.
He said that the multiplier effects would be overall boost in the economic activities of the citizens and also in the Gross Domestic Product
Sulaiman advised that Nigeria should consider what projects could be completed between now and 2018 when the IMF policy would be in operation bearing in mind the finance rule: “Do not use short term loan for long term project’’.
He said other things to consider were what would be the default rate in case the country defaulted and the standard interest rate or what would be the rate after the concessionary period.
“It is a case of categorising and prioritising your projects and take advantage of the concession for projects that have very low payback period,’’ Sulaiman said.
NAN recalls that the Managing Director of IMF, Ms Christine Lagarde, recently announced that the fund had introduced a zero interest rate concessional facility for low income countries up to 2018.
She said it was important for low-income countries to be able to actually absorb economic shocks without necessarily going to the international markets or relying on bilateral lending that could be far expensive.