Chinwendu Obienyi
Nigeria is home to over 37 million micro small and medium enterprises (MSMEs) all of which account for more than 80 per cent of the workforce population in Nigeria as well as 50 per cent in terms of th Gross Domestic Product (GDP).
This means that the contributions of SMEs to the Nigerian economy cannot be overstated. Supporting SMEs in Nigeria to flourish is crucial because it creates a growing middle class with disposable income, in relation to market opportunities for new investors.
This is because SMEs play a vital role by investing in community projects and financial support to charity organisations, enabling further development beyond their own ventures.
Despite several promises by different administrations, the SME sector has barely scratched the surface of its potential considering its impact in the economy and given the potential of SMEs to unlock Nigeria’s economic growth, one of the challenges dogging the sector has always been access to finance. This has been a pain-point for entrepreneurs in Nigeria, as access to funds has been an uphill task, with some of these entrepreneurs calling the efforts of the government and non-government organisations towards the sector a real fraud.
According to these entrepreneurs, the difficulty in assesing these loans can be attributed to the poor state of infrastructure in the country and inconsistent policies eked out by different government administrations.
But the narrative on access to funding is set to change with the Diamond Business Advantage proposition which is powered by Access Bank Plc.
With banks constantly criticized for their lack of support for SMEs, Access Bank is reiterating its commitment to the MSME business community with the Diamond Business Advantage (DBA) account, giving various start-ups, regardless of their sector, leverage to compete better for growth in markets determined by financial capability.
The Diamond Business Advantage is a business current account created by Africa’s largest bank, by customer-size, to assist emerging businesses scale for growth without worrying about capital to meet operating expenses and other business-related costs.
The proposition also helps start-ups in making better business decisions, managing cost, and structuring their services to access local and international markets.
The proposition is also available in 3 variants which gives Nigeria the freedom to upscale as well as convenience, value and flexibility for their businesses.
The variants include Basic, Growing and Established Diamond Business Account. The Basic variant is a business solution ideal for micro enterprises. These packages enable account holders to access funds needed for their business growth, eliminating various pitch stages that usually characterizes credit opportunities. By just opening a DBA account with the required turnover and minimum operating balance, account holders have access to credit, thus attaining their full potential.
The benefits of the proposition include access to the full bouquet of borrowing solutions for business growth, access to online and offline business management trainings and networking opportunities, access to your dedicated business partners for business advisory, access to over 50 courses on the SMEZone and invitation to monthly Business Webinar and Newsletter.
Other non-financial benefits include sector specific loan solutions to help meet customer business needs, capacity building forums to equip the customer with the knowledge to manage and grow the business networking and access to market opportunities and business management solutions and learning platforms.
These benefits are not limited to one sector as seen as they cut across agriculture, trade (wholesale and retail), education, real sector/manufacturing, hospitality, and health.
The Group Managing Director/Chief Executive Officer of Access Bank, Herbert Wigwe, while speaking at the 7th German-Nigerian Business Forum in Lagos, said the bank recognised that the greatest problem facing SMEs was access to finance.
He said the bank was committed to the provision of finance to SMEs at cheap rates.
Wigwe, while speaking during a panel session on access to finance at the event, stated that the bank was known for its culture of excellence in providing loans to businesses and organisations.
He said the interest rate charged by the bank on loans were a function of cost of capital and inflation.
He described the belief by some people that the bank had high interest rates as untrue, saying the bank understood that high interest rates created a high probability of bad and irrecoverable debts. The future of Nigeria’s economy is Small and Medium-Scale Enterprises because they can provide more than enough jobs to the unemployed if empowered.
“Even though it is not the primary responsibility of banks to provide equity finance, the Nigerian banking industry has a policy that all banks must dedicate five per cent of their annual profit before tax to funding of SMEs,” Wigwe said.
He added that the bank had recently donated N25 billion to female entrepreneurs in Nigeria to encourage the participation and engagement of women in wealth creation.
He said, “To reduce interest rates, we have to first work on reducing inherent costs such as cost of power and cost of infrastructure. Once all these are resolved, interest rate will come down because inflation will also drop.
“We also need to focus on local production; there is really no need to import. What we basically need is to produce what we need. It takes a while for all of these things to mature, but all of these variables will start coming down as soon as all these are in check.”