The challenge faced by Small and Medium Enterprises (SMEs) regarding access to finance from financial institutions can be reduced  if only they meet the criteria of having a good record book as well as a positive credit bureau rating.

 Disclosing this at a Business Workshop with Nigerian entrepreneurs in Lagos at the weekend, Head, Emerging Business, Diamond Bank Plc, Ayodele Olojede, noted that access to finance has always been touted as one of the critical challenges for growing SMEs, while adding that Diamond Bank is helping its customers to imbibe habits that would qualify them to access loans.

 Olojede further explained that the essence of the business workshop organized by the bank for entrepreneurs is to teach them about the importance of record keeping and making sure that their credit bureau rating is always top notch for them as without those two qualifying criteria, they will not be able to access loans and that access to finance challenge will not be solved.

 According to her, Information asymmetry is deeply rooted in the challenge that SMEs have regarding access to finance and what Diamond Bank has done is to invest in a hands-on-approach that helps to be able to gather information, validate information and build a financial statement for its customers.

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 She said, “On a monthly basis, we have at least 3 capacity building initiative and they focus on different aspect of the business that we run. The feedback we have gotten from the previous trainees has been positive as we have observed improved loan behavior of accounts belonging to these trainees”. 

Also speaking, Credit Analyst at Diamond Bank Plc, Cyprian Ofodum, explained that survey has shown that most SME businesses fail within their first five years of operations because of poor management  control, lack of experience, poor planning and coordination, and the learning curve factor associated with entering into a new business.

 According to him, “this has cost implications on the business and impacts on its profitability and depending on their business life cycle, most businesses usually make losses within the first few years of operation and might find it difficult repaying the loans (principal and interests).