A total of N76.9 billion out of the N220 billion Micro Small and Medium Enterprises Development (MSMED) fund has been disbursed to MSMEs from inception in 2013 to 2017, according to the Central Bank of Nigeria (CBN).
From the draft of 2017 annual report of the CBN released on Wednesday, the disbursement comprises of N53.1 billion (69.01%) disbursed through state governments, N12.6 billion (16.38%) through commercial banks and N10.2 billion (13.24%) through microfinance banks.
Others were Non-Governmental Organisation MicroFinance Institutions (NGO-MFIs), N0.5 billion (0.65%), cooperatives, N0.4 billion (0.55%); and development finance institutions (DFIs), N10.0 million (0.01%); and grants, N0.1 billion (0.17%).
A total of N4.3 billion was disbursed under the wholesale funding and grant components of the MSMEDF. This represented a decline of 81.3 per cent, below the N23.0 billion disbursed in 2016, due to reduction in the number of approvals, following intensified efforts on recovery. The sum of N4.2 billion (98.0%) was wholesale funding through Participating Financial Institutions (PFIs) to finance MSMEs, while N0.1billion (2.0%) was disbursed as grant to facilitate the registration of microfinance banks on credit bureaux and their integration into the credit reporting system.
Analysis of the wholesale funding by PFIs indicated that financial cooperatives accessed N62.0 million (1.5%); commercial banks, N0.37 billion (8.8%); microfinance banks, N1.6 billion (38.5%); non-bank microfinance institutions or NGO-MFIs, N7.5 million (0.2%); and state governments, N2.1 billion (51.0%).
According to the report, the routine and target examination of 793 MFBs revealed that the average capital adequacy ratio of the sub-sector declined to 32.58 per cent in 2017 from 58.09 per cent in 2016. Similarly, average portfolio-at-risk increased to 21.2 per cent at end-December 2017, from 18.9 per cent at end-December 2016, indicating a deterioration in the quality of risk assets.
The industry average return on assets (ROA) and return on equity (ROE) declined to 3.9 per cent and 7.6 per cent at end-December 2017, respectively, from 4.2 per cent and 10.7 per cent at end-December 2016. There was, however, improvement in the average liquidity ratio, which increased to 91.7 per cent at the end of December 2017, above 89.4 per cent at end-December 2016.
HOPE MOSES-ASHIKE
