Leveraging FirstBank’s Unique Specialized SME Proposition

Information, data and statistics abound and more are unfolding to capture the challenges, identify opportunities, provide solutions, and assess outlook for investment, growth and development of the Small and Medium Enterprises (SMEs) across industries in Nigeria.

As in other emerging markets and developing countries, it has been established that there exists a “missing middle” for SMEs to thrive. Critically speaking, SMEs face a more complex set of challenges relating to innovation, access to capital and industrial utilities.

Based on the latest research, jointly conducted by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and National Bureau of Statistics (NBS), known as the MSME National Survey 2017 Report, SME comprise small and medium enterprises put together. The small enterprises are businesses with worth of (excluding land and buildings) N5 million to less than N50 million, employing 10 to 50 staff, while the medium enterprises, also (excluding land and buildings), are businesses with worth of N50 million to less than N500 million, engaging 50 to 199 personnel, respectively.

In the Nigerian context,  micro enterprises are identified to form what is collectively known as the Micro, Small, and Medium Enterprises (MSMEs).

“MSMEs are the bedrock of Nigeria’s industrialization and inclusive economic development; and the most important component of industrialization as set out in the Economic Recovery and Growth Plan”, Vice President,  Prof. Yemi Osinbajo said some time ago. It boosts technical, technological and entrepreneurial capacities among critical segments of the populace, besides offering opportunities to drive jobs and wealth creation as well as income re-distribution within a society.

With a record of above 41.54 million registered MSMEs in Nigeria, more than 73 million are SMEs offering a total employment contribution of above 59.64 million persons that equals 76.5 per cent of national workforce, 49.78 per cent of gross domestic product (GDP) and 7.64 per cent of export receipts, as indicated in the NSE-SMEDAN 2017 Report.

Relating Nigeria to other countries, the International Finance Corporation (IFC) studies show that approximately 96 per cent of Nigerian businesses are SMEs compared to 53 per cent in the U.S. and 65 per cent in Europe. It also estimates that 65 million firms, or 40 per cent of formal MSMEs in developing countries, have an unmet financing need of $5.2 trillion yearly, equivalent to 1.4 times the current level of the global MSME lending. 

Apparently, government’s current medium term strategy (2017- 2020), the Economic Recovery and Growth Plan (ERGP), in line with more current trends, recognized MSMEs as the vehicle for driving national industrial output.

While the public sector focuses on reviewing and formulating new policies for MSME to grow, besides tightening holds on a vital role in providing enabling environment for it to thrive, it is expected that the private sector, more often than not, are seen to be pursuing the course with overarching vigour and innovating minds.

First Bank of Nigeria Limited has been a consistent promoter and supporter of the SMEs, providing notable interventions which include: overdraft for working capital, operational vehicles loans, equipment finance, commercial building loan, education management portal, contract & LPO finance, invoice discounting finance and, import finance.  Other interventions include bonds & guarantees, bill & tax payments, bulk payment & collections solutions, e-commerce platforms, non-oil export financing, domestic money transfers, zero COT accounts, import finance facility, key distributorship finance among several other products.

Record shows that in the last three to seven years, FirstBank has supported a total of 70,703 SMEs, and its financial support and dedication to the SMEs, comprising the loans given to the SME segment irrespective of product type, has also amounted to N170.3 billion, counting from 2017 to date.

Of recent, FirstBank had, after extensive research, identified seven pillars essential for the sustainability and growth of the SMEs in Nigeria, viz: access to infrastructure; access to talent; capacity building; policy and regulation; access to resources; access to market; and access to finance.

The words of Gbenga Shobo, deputy managing director at FirstBank, captured it succinctly: “First Bank has over the years been at the forefront of supporting businesses, especially the SMEs as we recognise that the SMEs are the engine of the economy. We are committed to ensuring that we leave no stone unturned as we connect with them in their continued contribution to national development in terms of the employment opportunities they create as well as their contribution to the nation’s GDP among many economic values.”

This latest onboarding ecosystem called FirstBank SMEConnect is a portal that houses the bank’s SME proposition, its approach towards banking and growing of the SME sector.

The portal allows SMEs to have access to a wide range of cutting edge exposures including workshops by Microsoft, Google and local seminars; Microsoft office 365, Sage accounting tool, Google my business and Google search engine optimization and; free business directory.  Others are First trader solution, LPO, IDF and others, liability products (First Current Business Account); workspaces, internet by Swift; legal and advisory services. In a word, the offers are just mouthwatering!

It’s unique selling proposition, according to the bank, is the congregation of these products & services on one platform for easy access and at competitive rates, in most cases to be discounted.

Recall that, in August 2019, FirstBank convened a 5-day SME Week to reinforce its support for SMEs, of which the high points of activities were the SME Masterclass on the theme, “Designing and Implementing a Growth Strategy for your Business”, and the one-on-one consultant with renowned business coaches that held simultaneously across six locations in Lagos, Abuja, Rivers, Oyo, Kano and Owerri.

In one of her speeches, FirstBank’s spokesperson, Folake Ani-Mumuney, whilst stating that businesses require more than loans – non-financial services – said, “We are determined to partner with businesses and pass on our own expertise and knowledge to small businesses across several sectors in Nigeria. Our experience in business spans several industries and segments. We understand the position most of our SME’s are in because we used to be in their situation and can provide valuable solutions for their business needs. We care about the path to success for our customers, we have walked this path and have developed solutions to ensure that the road to success is as stable as can be for our customers.”

The modern attitude and approach to empowering and creating an enabling environment for SMEs is that banks must be seen providing them with a positive customer experience and focus on leveraging new technologies that enable them to conduct know-your-customer (KYC); share information to deliver greater transparency in their working capital needs and business performance; among other informed decisions.

According to EY 2019 Global Fintech Adoption Index, “to retain their dominance, banks need to be at the heart of the SME business, using technology to better understand the needs and context of the business.”

Early this year, FirstBank and Microsoft 4Afrika went into partnership to support SMEs to build the capacity of local SMEs and accelerate their digital transformation by providing them with exclusive and tailored non-financial solutions, following a Memorandum of Understanding signed in June 2018.

At the event in Lagos, designed to promote technology adoption and skills development in SMEs, Taiwo Shonekan, FirstBank’s head, customer experience and value management, said, “With this partnership, FirstBank customers can buy Microsoft products at discounted rates in the local currency – the naira – as this seamlessly aids technology adoption, skills and capacity development among SMEs in Nigeria.”

While at the signing of the MoU, the General Manager, Microsoft Nigeria, Akin Banuso, said, “For SMEs, this means empowering them to digitally transform by using technology to be more productive, competitive and in a position to scale across borders. “We can help them do this by providing affordable devices, cloud-based software at pay-as-you-go models, anytime-anywhere access, and relevant training and content on how best to apply technology to their business.”

Culled from National Accord


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