Unlocking Credit Opportunities for Small Businesses

The World Bank and Central Bank of Nigeria (CBN) acknowledge the crucial role played by financial institutions in funding Micro, Small and Medium Scale Enterprises (MSMEs) for sustainable growth and economic development.  With commitment to lend more to MSMEs, many businesses are exploring Access Bank Plc’s  flexible credit policy by borrowing from the bank to expand their operations.

The World Bank says improving Micro, Small and Medium Scale Enterprises (MSMEs’) access to finance and finding innovative solutions to unlock sources of capital should be priority for every far-sighted commercial bank.

Reason being that MSMEs play a major role in most economies, particularly in developing countries. They account for the majority of businesses worldwide and are important contributors to job creation and global economic development.

In Nigeria, most formal jobs are generated by MSMEs, which create seven out of 10 jobs. However, access to finance is a key constraint to MSME growth, it is the second most cited obstacle facing MSMEs to grow their businesses in emerging markets and developing countries.

The MSMEs are less likely to be able to obtain bank loans than large firms; instead, they rely on internal funds, or cash from friends and family, to launch and initially run their enterprises.

Also,  over 40 million MSMEs exist in the country, employing over 80 per cent of the country’s population and contributing about 50 per cent of the country’s Gross Domestic Product (GDP).

The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, said disclosed that globally, MSMEs were last year confronted with shocks occasioned by the dis-ruptive impact of the COVID-19, with those in Nigeria badly affected.

To address the challenges facing MSMEs, Access Bank had unfolded various forms of support for operators of such businesses, through the $50 million loan support the bank secured from the International Finance Corporation (IFC).

Access Bank’s Group Managing Director, Herbert Wigwe, said the bank was committed to helping Nigerian businesses weather COVID-19 pandemic and set a course for recovery.

According to Wigwe, the funds has helped the bank increase liquidity to several Nigerian small and medium-sized enterprises navigating the economic challenges of COVID-19.

“In Nigeria, SMEs contribute over 45 percent of national GDP, account for about 96 percent of businesses and 84 per cent of employment. Access Bank, therefore, recognises the importance of SMEs to economic stability and is going the extra mile to ensure that such businesses are adequately financed to weather these testing times,” he said.

According to him, the IFC’s funding has not only enabled the bank to extend financial relief to clients across all sectors during the pandemic, but beyond the COVID-19 crisis as well.

Wigwe said the partnership with IFC would also help set Nigerian businesses on a recovery path.

The funds from the loan, made through IFC’s global COVID-19 ‘Fast-track Financing Support Package’ enabled Access Bank to provide increased trade financing and working capital lending to its business clients experiencing disrupted cash flows, supporting business activity and preserving jobs.

Reiterating Wigwe’s comments, IFC Country Manager for Nigeria, Eme Essien Lore, said, “It is crucial to support smaller businesses to keep the wheels of Nigeria’s economy turning during today’s unprecedented economic challenge.

“IFC’s longstanding partnership with Access Bank means together we can move much-needed funding to businesses that need it most, helping them remain in business and retain their employees.”

Access Bank, Africa’s largest retail bank, serves more than 36 million customers across a network of 677 branches.

In line with its drive to support entrepreneurial spirit in the country, the bank recently rewarded serving members of the Nigeria Youth Service Corps (NYSC) with over N15 million in the third edition of the bank’s youth business challenge competition, Accessprenuer.

The competition was held simultaneously across five NYSC camps in Abuja, Osun, Enugu, Nassarawa and Rivers States.

According to the bank, five top winners won N1 million each, while others were rewarded with consolation cash prizes totaling N10 million during the final business pitch of the contest for NYSC 2021 Batch A Stream II Orientation Course.

Winners of the N1 million star prize were Easngbedo Precious in Abuja camp; Nwakor Favour Alex in Osun; Olusanya Miracle in Rivers; Omoha arinze in Enugu, and Egbewole Abduljelli in Nassarawa camp.

Speaking on the Accessprenuer challenge initiative, Executive Director, Retail Banking, Access Bank Plc, Victor Etuokwu, said: “The challenge is aimed at promoting entrepreneurial aspirations among talented corp members. So far, the competition has proved to have a great impact on youth empowerment in the country as we received more entries during the current challenge.

“It is a way to support the young men and women who are just graduating from university to grow. We are also using this as an opportunity to imbibe the spirit of entrepreneurship among the youths whilst providing them with financial grants through this competition to grow them from job seekers to employers of labour.”

The pilot phase of the Accessprenuer challenge competition by Access Bank was in partnership with the NYSC Skills Acquisition & Entrepreneurship Development took place across three states (Ogun, Enugu and Abuja) in February this year.

The scheme was designed to train corps members on business plan writing, after which a competition will be held to select the top winners with bright and feasible business ideas within the mandatory 21-day Camp orientation exercise.

Similarly, the bank recently launched what it termed the ‘Diamond Business Advantage (DBA) lite’ as part of efforts to increase its digital loans and enhance access to finance for young entrepreneurs.

The bank said the product which is targeted at the youths was designed to add value to micro, small and medium scale enterprises.

Speaking during the launch of the product in Lagos, recently, Etuokwu, said, entrepreneurship is essential for the growth of any nation.

He said: “DBA Lite is a product of the erstwhile Diamond bank via the Diamond Business Account (DBA) and that was one of the best products in the market but after the merger, we renamed it as DBA but this innovation; DBA Lite is targeted for the youths who are start-ups, established or growing. This innovation will bring access to digital loans for the youths because that is what we want to do with this innovation.”

Etuokwu noted that the digital loan would be in the form of N50,000 to N5 million, adding that entrepreneurs can only access the loan once they meet the requirements.

According to him, Access Bank accounts for over 50 per cent of digital loans in the industry because it is gives such loans at an average of N18,000-N20,000 daily.

“Last year, four million people accessed N100 billion and we are targeting more in 2021. We are growing and we will keep growing because our digital loans are not for the youths only but for small business owners, employees and the rest of them and I am assuring you that we will do double digit this year as that is the plan.

“As we speak, we are averaging N12 billion to N13 billion every month and so we should be somewhere around N60 billion to N70 billion and clearly, we will do more than we did last year,” he said.

Giving more insights into the product, Etuokwu noted that the features of the product includes less documentation, affordability, convenience, access to market, access to finance, access to business loans and access to payment acceptance services.

The bank has through its ‘W’ initiative continued to support female entrepreneurs. The bank had unveiled the ‘W’ initiative to accelerate its support for women. In addition to financial inclusion, the initiative also focuses on women empowerment offerings. Some of these include mentoring, capacity building, maternal health services, access to loans and credit facilities.

In line with its support for female entrepreneurs, the bank also unveiled the third edition of its Womenpreneur Pitch-a-ton Africa programme.

The Womenpreneur Pitch-a-ton Africa programme was designed to provide female- owned businesses across Africa an opportunity to access finance, world-class business trainings as well as mentoring opportunities.

The Group Head, ‘W’ Initiative, Access Bank, Ms. Ayona Trimnell, said Access Bank has been a leading advocate for women’s economic empowerment in Africa.

She added: “We launched the first Womenpreneur pitch-a-ton initiative in 2019 in line with our value proposition to be the number one bank of choice for women in Nigeria, and we have received over 100,000 applications over the last two years.

“In 2020, despite the pandemic, we were able to expand the programme to other female entrepreneurs across seven African countries with three winners emerging from Sierra Leone, Ghana and Zambia out of 50 finalists. “This year we are making the programme bigger and better by increasing the numbers to 100 women entrepreneurs who will emerge as finalists.

“The programme will also be opening up to a total of 9 African countries Nigeria, Ghana, Zambia, Rwanda, Mozambique, Kenya, Democratic Republic of Congo, Sierra Leone and the Gambia.”

The 2021 Womenpreneur Pitch-a-ton Africa programme was unveiled on Monday and will run through August 13, 2021. It offers financial grants, an exclusive certified capacity building program and business coaching aimed at empowering women entrepreneurs.

On his part, Wigwe said: “For us at Access Bank, supporting and empowering women is truly at the heart of our strategy and other things we have to do as far as sustainability is concerned.

“In the last couple of years, we have made significant progress as a bank and there have been several things that have been done in terms of supporting women.

“The ‘W’ initiative is supposed to inspire and empower women as well as female entrepreneurs. When we started doing it, some people thought it was a joke.”

With the introduction of the W Power Loan, female owned businesses can now request loan from the bank just after 30 days of operating an account.

Wigwe has also been recognised as the African Banker of the Year at the 2021 edition of the African Banker Awards.

A winner of one of the most prized categories at the Awards ceremony for the second consecutive year, Wigwe was recognised for his stellar leadership in the market expansion of Sub-Saharan Africa’s largest bank despite the negative impact of the COVID-19 pandemic. Over the last 12 months, Access Bank has established a presence in South Africa following its acquisition of Grobank.

Accepting the award, Wigwe said Access Bank is focused on promoting corporate discipline, adding that the Bank wants to be in key markets on the continent, building a payment gateway and providing trade finance support.

“We want to be seen as the best bank supporting the African Continental Free Trade Area agreement (AfCFTA). In terms of diaspora remittances, we are present in key areas in the continent,” he said.

The African Banker Awards have become the most respected and recognised industry event celebrating African banking achievements.The organisers this year, put emphasis on recognising and rewarding institutions that contributed to the real economy which has suffered from the impact of Covid-19 as well as contributed to women empowerment on the continent.

Commenting on the award, Group Publisher of African Banker and Chair of the Awards Committee, Omar Ben Yedder said, “Herbert is one of the most respected bankers on the continent, without a shadow of a doubt.

The bank has gone from a lower ranked Nigerian bank when he joined the group as Deputy CEO to become one of Africa’s leading financial services groups. He has shown a relentless pursuit for growth, but has done so in a measured and calculated manner. What he and his team have done at Access Bank is nothing short of remarkable.”

The awards ceremony held virtually during the Annual meetings of the African Development Bank.

Credit: The Nation