Starting a business anywhere in the world is not so easy.

In Nigeria, you will have to think of running a power generating set, a borehole for clean water and engaging security operatives to secure your premises.

These challenges are compounded by the difficulty in getting a loan from a formal financial institution.

Most of the banks demand for collateral or assets that these small business holders cannot afford.

A 2016 NASSBER report highlighted that only 3% of SME owners that were surveyed, revealed that they had received their start-up loans and capital through formal financial institutions like banks.

On Tuesday, however, a little ray of hope surfaced for persons looking to establish a business in Nigeria.

The Senate passed the Independent Warehouse Regulatory Agency Act to solve the problem of collateral by allowing businesses to secure loans using commercial warehouse receipts.

The Senate President, Bukola Saraki, said the enactment of the Act is the upper chamber’s Economic Reform Agenda targeted at making it easier for Nigerians and foreigners to do business in the nation.

“We have focused on passing laws that will create more opportunities for SMEs to access the credit that they need to grow.

“Additionally, with the Secured Transactions in Movable Assets Bill, which passed on the 9th of May, 2017, business-owners will be able to access credit using movable assets like cars, jewellery, and computers,” Dr. Saraki stated in a post on his Facebook page.

He believes the reforms will also serve to liberate Nigeria’s financial services sector from the fixed asset system which currently places too much emphasis on land as the base capital.

According to him, they will also create more leverage for Nigerian banks and credit agencies to lend more to the real sector.

Small and Medium scale businesses employ at least 84% of Nigeria’s workforce and are major drivers of the economy, a reason the Senate President highlighted had informed the push for easier access to loans.  

“Hence, if our SMEs are provided with opportunities for sustainable growth, our economy thrives, and we as a nation are all better of,” he added.