An Evaluation of Microfinance Initiatives for Financing Medium and Small Scale Industries in Nigeria

Abstract

The contributions of small and medium scale enterprises to the economic sector of any nation cannot be ignored by any means. In most countries, small and medium scale enterprises contribute significantly to the Gross Domestic Product (GDP) of the economy. The industry constitutes an average of 75% of entrepreneurship efforts and absorbs a reasonable percentage of a society’s labor force into the work force group (Onwumere, 2000). Industrialization policies of government in the past have unduly favored large scale industrial promotion, with the hope that there would be positive revitalization jump-starting the economy. But rather than having a positive transformation, the situation grew worse; what was evidenced, were sporadic geometric economic depression and outrageous economic slavery by multinational industrial organizations. This article evaluated the overview of government’s microfinance initiatives in the efforts to provide funding, technical and other types of support for micro, small and medium scale industries in the 21st century – it looked at the age when African countries began to appreciate the role of small and medium scale industries in the industrial growth and economic development of the nation. The emergence of non – governmental organizations in the provision of microfinance credit scheme initiatives was also noted to have contributed immensely towards micro and rural entrepreneurship financing. Related issues pertaining to micro finance policies and initiatives of government in the establishment of Small and Medium Scale Enterprises Equity Investment Scheme (SMEEIS) funding were discussed extensively in areas such as, microfinance policy; the objectives; the targets; strategies for accomplishment; establishment of frameworks; eligibility; other financial institutions involvement; supervision, regulation and control. An in-depth analysis of the new micro finance policy was initiated, recommendations on the effective implementation were proffered and the author believes that if the prescriptions in this article are implemented, the nation would witness a new dawn in small and medium scale enterprises financing.