Finance houses have been urged to explore the Nigerian debt market in ensuring that they have adequate access to cheap funding for onward disbursement to micro, small and medium enterprises in the country.Speaking severally at a stakeholders’ luncheon and introduction of the N1 billion Investment Note of Crownrise Finance Plc in Lagos yesterday, stakeholders in the sector stressed the need for finance house to seek funds that are cheaper than what they get from deposit money banks so as to create cheap funding for SMEs.
The director, Other Financial Institutions Department (OFID), Central Bank of Nigeria (CBN), Tokunbo Martins in her keynote address said that finance institutions have been established to operate within the middle-tier of the financial system with a focus on the Small and Medium Enterprises (SMEs) segment.“The subsector is expected to play complementary roles to the Deposit Money Banks and Other Financial institutions by bridging financial gaps and meeting the financial needs of its target customers. But most of the financial companies have not demonstrated the capacity to deliver on this mandate due to paucity of funds, among others,” she said. Commenting on the N1 billion Investment Note of Crownrise Finance Plc, she said the bond issuance by the finance house will pave way for other finance houses to follow suit, accessing cheap funds by tapping into the bond market. She said it is expected that the proceeds from the proposed Crownrise Bond issue by Crownrise Finance Plc would be judiciously applied by the management of the company to boost the SMEs subsector and the Nigerian economy in generally, while at the same time meeting the needs and expectations of all stakeholders.