Small and Medium Enterprises Equity Scheme


The Small and Medium Enterprises Equity Investment scheme is a voluntary initiative of the Bankers’ Committee approved at its 246th Meeting held on 21st December, 1999. The Scheme requires all banks in Nigeria to set aside ten (10) percent of their Profit After Tax (PAT) for equity investment and promotion of small and medium enterprises.

The funding provided under the scheme is in the form of equity investment in eligible enterprises and or loans at single digit interest rate in order to reduce the burden of interest and other financial charges under normal bank lending, as well as provide financial, advisory, technical and managerial support from the banking industry. Every legal business activity is covered under the Scheme with the exception of trading/merchandising and financial services.

Nigeria’s SMEs like their counterparts elsewhere are perceived as a high risk segment of the market for loanable funds by banks. Unstable macroeconomic policies further make banks to be conservative about exposure to them because of their higher failure rate. Although short-term loans are available, they are available to larger enterprises. Previous public-sponsored financing programmes failed to make the desired impact due largely to high default rates. Few domestic equity sources for SMEs exist due to their inability to meet listing requirements. It is in recognition of the persisting “equity gap” in SMEs and their promoters’ inability to access the stock market as an alternative, that this initiative is predicated.

Small and medium scale enterprises are indispensable instrument that contributes to the accelerated industrialization in developing countries as well as many countries of the world. It also serve as sources of inputs for large production concerns in big and developed economies in other to achieve the attainment of accelerated economic growth development of nation. Based on the significance role played by those enterprises industries, the government throughout the world favourable disposed towards the idea that help to promote the growth




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Adekemi is a Pastor by calling and Dentist by profession. She is the Co-founder of ‘Komplete Woman’ an organization whose aim is to inspire and mentor young women to discover their purpose early. She is an associate fellow of the Royal commonwealth society. She is passionate about God, writing, poetry and influencing the younger generation to fan the flame of their potential.