Lai Mohammed Urges MSMEs To Embrace ‘Cooperative’ Banking System
A former Minister of Information and National Orientation, Alhaji Lai Mohammed has called on Micro, Small and Medium Enterprises owners in Nigeria, to embrace ‘cooperative banking’ system to beat the challenge of rising interest rates which usually make it difficult for them to access loans from banks.
Alhaji Mohammed, made the call recently during the kick off of the 14th Gateway International Trade Fair at Abeokuta, Ogun State capital, enjoined entrepreneurs to refrain from exporting raw materials, but engage in processing of such to products that are of standard and could be exported to improve on the country’s foreign earnings.
Speaking with journalists at the event, Alhaji Mohammed said “talking about the high interest rates, the way out is cooperative banking, it is like the ‘esusu’ system that our forefathers employed in those days.
“In this kind of arrangement, about 20 to 40 people who belong to same industry can come together and begin to make contributions which one of them take by month end, and another person take the next month, until it goes round and the interest rate is not more than 6 or 7%, the cooperative banking is the way to go”
He explained that to boost balance of trade with the outside world, “we should refrain from exporting our raw materials, we must add values to our raw materials and then we shall be able to have good export markets.
“We must take the advantage of the regulatory bodies to meet up with the standard. Luckily, Afreximbank has set up a place here in Ogun State where you can go and check the standard of your products to know if they are fit for export.
“Rather than exporting our cocoa, our gold, we need to set up factories that can help with the processing to give them more value before they are exported”.
Speaking earlier, the Chief Executive Officer, Giessen Chamber of Commerce and Industry of Germany, Dr. Mathias Leder lamented the low volume of trade between Germany and Africa.
Dr. Leder said that the German volume of trade with Africa is 2% while Nigeria account for less than one percent.
He explained that the major inhibitors to the growth of international trade with Africa and Nigeria in particular is the lack of skilled manpower, poor access to funding and lack of innovations that are necessary to drive international trade.
To solve this challenge, the German international trade expert said that Nigeria must improve the productivity of its labour, capital and embrace innovation.
As a way of helping in this area, he said the German chamber of commerce runs a dual training vocational training which allows people to work in big German companies for three days and go to vocational school for training for another two days.
He said that this programme will not only expose the participants to cutting edge practical skills but also provide them with opportunity to work in Germany and other part of Europe earning as much as equivalent of N5 million or more in a month.
“To change the narrative of the trade imbalance that Nigeria is having with Germany, you can improve the productivity of labour, you can improve the productivity of capital and innovation. We have this project called dual vocation training which means to improve the factor of labour”.
“Also legal migration can improve productivity of the country because these people who migrate to Germany get a training there and they get a monthly payment that is equivalent to N5m and it can even be double depending on the training and where you work, for instance if you work in the IT sector and this is our second project that we have carried out last week”.
“To improve the productivity of capital is important. It is also not easy for the small and medium businesses to get loans in this country, because the interest rate is too high, about 20%”.
“The leadership of the OGUNCIMA has been trying to do something to strengthen the cooperative economy and cooperative banking in such a way that the interest rate for loans will not be more than 6% such that the small and medium business enterprises can afford”.
In his remark at the programme, the State Governor, Dapo Abiodun, who was represented by the State Commissioner for Agriculture and Food Security, Bolu Owotomo described the trade fair serves as a strategic hub for networking, partnership opportunities, and investment expansion, strengthening State’s economic landscape.
Gov Abiodun said that the state is rich in resources, creativity, and talent and will continue to explore collaborations and partnerships to stimulate economic development, and create sustainable jobs for our people.
He urged all exhibitors and visitors to take full advantage of this trade fair, explore new markets, build strategic alliances, and embrace innovations that will drive business expansion.
Abiodun said that his government, through relevant agencies, will continue working closely with the private sector to enhance industrial growth and investment opportunities with a view to expanding the economic shared prosperity of the state.
Vanguard
