Economic Hardship: Akwa Ibom Starts Lending SMEs N1.74 Billion In Microcredit
The Akwa Ibom scheme will award N150,000 grants to 1,055 beneficiaries each.
As part of intentional efforts to promote economic growth and increase poverty reduction initiatives throughout the state, the Akwa Ibom government has started to disburse a N1.74 billion microcredit loan to small and medium-sized enterprises (SMEs).
The loan program's first phase saw the distribution of more than N260 million; this is the second phase.
In an interview, Akan Okon, the commissioner of finance, revealed that the program was anticipated to help over 4,000 small business owners from the state's 31 local government units.
The state government has agreed to pay the interest accruing from the loan on behalf of the beneficiaries, Okon said, adding that the disbursement was being handled through Micro Finance Banks (MFBS). The beneficiaries would still be responsible for paying the principal.
"Last week, we commenced the second phase of the disbursement of funds for Small and Medium Scale Enterprises (SMEs), the programme is ongoing because this sector of the economy is a major catalyst for economic ment.
“Market women, traders and artisans are the beneficiaries. The state government has been magnanimous to pay the interest on the loan while the beneficiaries would only pay the principal,” he said.
He asserts that the amount to be given to each beneficiary is based on the ability and revenue of the company, stressing that it is a loan that needs to be paid back rather than a grant.
The commissioner expressed happiness that recipients of loans under the first phase of the program, which distributed N260 million, have begun making loan repayments. “A significant number have paid already back the loan noting that by doing so, thousands of others would be able to part of the loan scheme,” the commissioner said.
“You know that at that level, funding is a major problem for expanding your business that is why government has attached much importance because if they have funds available, they will be able to grow their businesses and this will in turn lead to the growth of state economy,” he said.
He commended Governor Udom Emmanuel for applying his extensive banking industry experience to the state's resource management, noting that the implementation of an e-payment platform in the state has closed all revenue collection leaks and loopholes.
Given the limited resources at the state government's disposal, the commissioner stated that significant improvements to the state government's Internally Generated Revenue (IGR) were anticipated after the launch of the e-payment platform. “Whatever is due to the government is now brought into government purse for the development purposes,” he added.
“Before now, what we had in place for payment of government revenue was manual receipts and you know the problems associated with such systems, leakages and wastages etc. The introduction of the e-receipt facility is one of the initiatives of state government to ensure that the leakages are blocked,” he said.
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