Analysts have said that the Central Bank of Nigeria’s N220 billion fund for micro, small and medium enterprises development fund will help the sub-sector boost the economy.

According to the CBN governor, Sanusi Lamido, the fund will give entrepreneurs access to cheaper funds on longer terms.

The former head of Corporate Communications, CBN, Tony Ede said “no country can grow and develop without adequate funding of small and medium scale entreprises” because they employ more than the larger companies. Hence there’s a need to make that sector work, on Channels Television’s breakfast programme, Sunrise.

He identified lack of management skills as the major problem of operators in this sub sector.

However, a management consultant, Obiora Onyeaso, said funding is the initial challenge for people in the sub sector, adding that there are other kinds of issues like management, environment and multiple taxation.

“There are all kinds of issues but funding remains the primary issue for lots of businesses.” He said.

He explained that the N220 billion fund is for “those MFI’s (Micro Finance Institutions) that have been successful at lending out funds and recovering those funds.”

Following complaints that commercial banks in Nigeria only give short-term loans, Mr Onyeaso said that “every bank determines how much risk it wants to carry” and this determines the loan terms individuals can obtain.

Mr Obiora also said that the funds should be pushed out by the last quarter of the year 2013.