Hope Rises for SMEs as Entrepreneurship Bank Bill Passes Second Reading in House

Udora Orizu

The House of Representatives at the plenary Wednesday passed through second reading a bill for an act to establish the Entrepreneurship Bank of Nigeria.

The proposed legislation titled, “Bill for an Act to Establish Entrepreneurship Development Bank of Nigeria to charge it with the Responsibility, among other things, to provide Medium and Long Term Finance for Indigenous Small Businesses and to Provide for Establishment of Nigerian Entrepreneurship Development, Encourage Aspiring Entrepreneurs and Small Scale Enterprises in Nigeria,” is sponsored by the House Spokesman, Hon. Benjamin Kalu and Olalekan Afolabi.

Leading the debate on its general principles, Kalu said the Bank when established will be charged it with the responsibility to among others, provide medium and long-term finance for indigenous small businesses in Nigeria as may be determined by the Board of the Bank from time to time.

According to him, the bill which focuses on Nigerian youths intends to provide improved access to finance for youth entrepreneurs in innovation, manufacturing, agriculture and trade.

He said a fundamental challenge to youth entrepreneurship capacity is the lack of access to functional and effective finance, hence existing financial institutions are not servicing the real needs of the indigenous business or initiatives owned and run by the youth. 

Kalu said, “Even the African Development Bank has seen the need to have a specialized bank for the youths.  According to ThisDay Newspaper of 29 May, 2022, the President of the AfDB Group, Dr. Akinwunmi Adesina at the conclusion of the 2022 Annual General Meeting of the African Development Bank in Accra Ghana, disclosed that the bank had embarked on the design of youth entrepreneurship investment banks in  African countries included Nigeria.  

“A closer look at the operational modalities of the Bank of Industry (BOI), Bank of Agriculture (BOA) and the Development Bank of Nigeria (DBN) would show that there is no clear-cut intention and support for indigenous small businesses owned and run by youth. Commercial and microfinance banks are not even feasible options for indigenous small businesses.  This is the gap which the contemplated bank would fill. There is need for a specialized bank which would target the youth at different levels and scopes with emphasis on harnessing abundant potentials for economic growth and greatness of the nation.

He further said, “Other functions of the bank shall be to Design and implement schemes of investment finance for parties carrying on small businesses in Nigeria; enter into guarantee agreements with other parties to guarantee payment in specified circumstances. Lend and advance money or give credit to such persons or companies on such terms and conditions as may seem expedient and in particular to customers, companies, corporations, firms and other bodies which have dealings with the Bank and to give guarantee or become surety and give security for any such persons or companies.”

Thereafter, the Bill was voted on, passed through second reading and referred to the Committees on Finance and Industries.