CHIGOZIE AMADI
Governor Alex Otti of Abia State has taken a bold step to promote economic growth in the rural areas with disbursement of N1 billion to 10,000 persons engaged in productive nano, micro and small businesses.
The interest-free loans would be disbursed to beneficiaries under the Abia State Cooperative Support Scheme targeting rural and urban dwellers drawn from across the 184 political wards in the state.
Speaking at the formal launch of the scheme, Friday, at the International Conference Centre Umuahia, Otti described the event as another milestone in the community-oriented economic rejuvenation agenda of his government.
“The Abia State Cooperative Support Scheme represents the practical commitment of the state government to support our army of nano, micro and small-scale entrepreneurs to build new levels of success on the strength of the leverage provided them by public-sector driven initiatives such as this,” he said.
The governor said that 70 percent of the first batch of beneficiaries comprise “women and young people who have shown great industry by doing so much with very little resources”.
“Thousands of the beneficiaries selected for this batch are petty traders, farmers, and artisans who have over the years toiled on their own without the kind of structured support that their peers from other parts of the world take for granted”.
He said that with the scheme having taken off, the state government would in the next few days, reach a minimum of 50 different entrepreneurs in every ward in the state, offering them the financial support they need to grow their businesses.
The loan, he explained would enable the beneficiaries to earn money to support their families, and contribute even more to the economic growth of the communities where they live.
According to him, the Abia State Cooperative Support Scheme would simultaneously address the financial difficulties owners of small-scale businesses in the rural and urban communities often face”.
Apart from providing the needed funds, Otti noted that the scheme would also “send a clear message to everyone that the only way to draw the attention, and support of the government is by engaging in productive ventures”.
“Our administration is very particular about developing the business-consciousness of the people at the grassroots because it is the most effective way to tackle the crisis of endemic poverty, and worrisome unemployment rate,” he stated.
Otti, who was in the private sector as bank chief executive prior to becoming Abia State chief executive, said that this model of financial support to micro and small-scale businesses has worked in South East Asia and “is also good for our people”
He stated that the fund could have been disbursed as cash transfer to the same targeted people and the effect on aggregate spending would be the same.
However, Otti pointed out that “the difference is that this kind of spending will only increase consumption without necessarily stimulating production” hence the strategic adoption of community-based cooperatives “for effective ownership and control of the scheme”.
He said: “Our model is geared towards improving production, creating jobs and reducing poverty to the barest minimum. It is akin to the difference between giving someone fish and teaching him how to fish.
“Our target, beyond the present number of beneficiaries, is to reach about 100, 000 businesses directly over the next 36 months because we are optimistic that today’s beneficiaries will put in honest effort to repay the loans in time so that others can benefit”.
Governor Otti enjoined beneficiaries of the loan scheme to understand that “the success of this scheme lies entirely in the willingness of beneficiaries to repay what had been borrowed”.
He stressed that programmes like this have “worked successfully in more than 60 countries across the world over the last 50 years including Bangladesh, Vietnam, Indonesia and Malaysia”.
“It then follows that we can effectively replicate the success of the community-oriented microcredit scheme in our dear state,” he asserted.
