Nigeria’s small and medium enterprises sector accounts for more than 84 percent of jobs in the country. Not only does this contribute to the national Gross Domestic Product (GDP), but it also plays a crucial role in reducing unemployment and generally stabilizing the economy. According to the Ministry of Industry, Trade and Investment, this is as a result of the presence of over 37.07 million MSMEs, micro, small and medium-scale enterprises.
However, a major challenge that is common to the many diverse small businesses is access to capital.
The problem of securing business funds lies mostly in the inability of small business owners to meet the demands or requirements for getting a loan either from government or commercial banks. This is a significant disparity to what is obtainable in developed countries, where adequate access to funds is provided to SMEs, the bedrock upon which economic growth and development are achieved.
As recently reiterated by the Governor of the Central Bank of Nigeria, Godwin Emefiele, banks are saddled with the responsibility of providing credit to the real sector and funds for businesses, big and small alike. Most banks in the country neglect this role, often put off by the risky nature of granting loans to emerging businesses particularly in a tough economy such as Nigeria’s.
Regardless, leading Nigerian financial institution, Access Bank, goes against the tide in support of small business owners and contributing substantially to the development of SMEs in various capacities such as finance, technology, management and capacity building.
Victor Etuokwu, Head, Retail Banking, Access Bank Plc. has reiterated the commitment of the bank to impact SMEs positively. “It is something we have to do and take as our primary role in the economy, we are providing a lot of benefits targeted at developing the macroeconomic landscape of the country. The bank has remained committed to providing the much needed financial support to businesses,” he said.
In providing funds to SMEs, Access Bank through its Emerging Business proposition offers a wide range of products, credit facilities and sector-specific loan solutions designed to meet the peculiar needs of businesses in certain industries.
“We empower our customers by helping them to access finance; we also help them in capacity development by training them to do their businesses better. We also teach them about basic banking services,” Etuokwu explained.
Access Bank has the highest loan book in the industry at over N3tn- Victor Etuokwu, Head, Retail Banking, Access Bank Plc.
At the heart of the funding solutions is the unique Diamond Business Account (DBA). This covers a unique financial product (Diamond Business Advantage) made to suit any stage of business, and a range of non-financial services that will help small business owners make better decisions, manage cost, access finance, segment market and grow their business across local and international markets.
The Mediloan QualityCare program for professionals in the health sector is a partnership between Access Bank and the Medical Credit Fund. It is designed to simplify business banking, provide financial support as well as advisory services to healthcare organizations. Under the Mediloan QualityCare Program, professionals can access funds at interest fees of 23 percent per annum.
For small business operators in the agricultural sector (primary production, input supplies, processing or distribution), Access Bank is in active participation in various federal government initiatives to provide long tenured financing and at single-digit interest rate – nine percent – to the sector. Some of the initiatives are the Commercial Agriculture Credit Scheme (CACS), Agricultural Credit Guarantee Scheme (ACGS), Access Export Finance (DEF), etc jointly managed with the CBN.
Knowing that high-quality education is often attributed to schools having state-of-the-art infrastructure and modern amenities, Access Bank provides a collateral-free finance product for Private Crèche, Nursery, Primary and Secondary Schools that are duly approved and registered by the Ministry of Education and Corporate Affairs Commission.
Some financing solutions available to the manufacturing/real sector are revolving credit in the form of a line of credit or term loan for short-term financing with competitive interest rates; business installment loan with competitive rates for expansion, new equipment purchase and technological innovations available for up to 3 years; Local Purchase Order (LPO) finance to carry out supply requests and Contract Finance for the execution of contracts from Diamond Bank’s approved list of companies.
Other sector-specific loan solutions are available for players in hospitality and trade, while other borrowing solutions for small businesses are Loyalty lending, Vehicle and Asset Financing, MSME instalments and revolving credit.
In addition to offering lending solutions and products, Access Bank has also disbursed huge sums to support the development of SMEs in the country.
Last year, the bank’s Group Managing Director, Herbert Wigwe, disclosed that the bank had donated N25bn to female entrepreneurs in Nigeria to encourage the participation and engagement of women in wealth creation.
Prior to that, the bank’s loan portfolio had reportedly reached N60 billion mark with about 250,000 SMEs’ accounts and the intention of doubling that figure the following year.
Also, Access Bank recently earmarked N1 billion for SMEs in the health sector in fulfilment of its pledge to continue to support startups across the country. And even in Liberia, the bank signed a technical assistance partnership agreement with the African Development Bank (AfDB) to alleviate the huge financing gap faced by Liberia’s micro, small and medium scale enterprises (MSMEs) through a grant from Fund for Africa Private Sector Assistance (FAPA) to Access Bank Liberia.
More than just finance
Access Bank has consistently positioned itself as the SME Bank of choice through its relentless commitment to economic empowerment of individuals and growing entrepreneurs. The bank shows no sign of slowing down, particularly as the Group MD recently restated its commitment to the provision of funds and loans to Small and Medium-scale Enterprises (SMEs).
Considering the fact that it takes more than just access to finance for businesses to grow, Access Bank takes a holistic approach in helping business owners with the knowledge to manage and grow your business by providing capacity building forums, networking and access to market opportunities as well as business management solutions and learning platforms.
Some of the training and advisory initiatives include business seminars, business workshops, market/financial literacy forum and the business clinic, which cut across focus areas such as Financial Management, Sales & Marketing, Brands & Advertising Human Resources and Tax.
The efforts of Access Bank in providing non-financial services to develop SMEs can be traced back to 2013, when it announced that it will be focusing on the SMEs through a series of initiatives that will aid development across key sectors of the economy, by identifying 13 critical segments of the economy and creating a full division (Business Banking) to support the needs of the SME sector in Nigeria.
The following year, the bank unveiled a series of SME capacity development initiatives for its contractors, saying the move represents an innovative partnership that seeks to provide strategic solutions to enhance their operational efficiency. The bank also trained over 150 Small and Medium Scale Enterprises (SMEs) operators on the basic methods of business and financial management in 2015 to position them for access to finance as well as continuity.
And in 2018, Access Bank’s W Academy, in partnership with the Enterprise Development Centre (EDC) of the Lagos Business School (LBS), organised a professional business capacity-building workshop for 500 female entrepreneurs in Port Harcourt, Abuja and Lagos.
More so, the bank’s SMEZone (ACCESSSMEZone) is a free online learning management system, which hosts SME related digital content. The platform is fully interactive and engages with SMEs, recommending relevant online courses, content, events or initiatives. For networking and access to market opportunities, the bank has a Business Club, Business Community Forum and Event Collaborations for small business owners across several sectors.
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