In the coming weeks, Fidelity Bank Plc will be launching the GreenMall, an online market place with fully integrated e-commerce capabilities for online payment engine, delivery logistics, advertising boards, and business networking opportunities, etc. for SMEs. This was disclosed by Aku Odinkemelu, executive director, South, Fidelity Bank Plc, at the bank’s South-East Regional SME Conference recently.
Odinkemelu, who was the lead discussant on the panel discussion session on ‘Overcoming Barriers to Funding’, said the numbers of SMEs in Nigeria has increased from 17m in 2011 to 37m by 2013 and employs 60 – 80% of the workforce while contributing over 60% of the GDP.
She lamented that SMEs in Nigeria are faced with key challenges. These challenges, she enumerated to include, low levels of business management capacity which has to do with poor managerial/entrepreneurial skills and inadequate business processes; inadequate research/market information to determine business viability; poor access to market; limited access to the export markets; inadequate record keeping; absence of proper business planning; lack of long term strategy and poor business model; low technology leverage; key man risk, etc
Other challenges are finance, which has to do with limited options; high cost; amount and tenor. On key remedies to the challenges, the ED tasked Fund Providers to do the following amongst others to tackle the challenge: Provide business management capacity building support and other accompanying support to empower SMEs by partnering
with a network of pre-qualified SME-focused professional services firms (Alliance Partners) to provide needed professional services support- accounting, HR, website building and management, inventory management/ERP deployment, etc to target MSMEs as well as creation of low-cost shared services platforms for back and front office support.
She stated that the Fidelity approach comes handy. According to her, the bank work with a network of pre-qualified SME-friendly professional services firms who provide business management capacity building support and services to our SMEs at discounted rates.
“We have developed a partnership with Sage to develop FSBA+, a product that integrates Sage One Accounting Software to the FSBA to enhance recording for our SMEs,” she maintained.
Continuing, she explained that funders should allow nil/low-cost of banking transactions to enable MSMEs build up relevant transactions/activity history to position them more strongly for formal lenders (e.g. Fidelity Small Business Account); de-risk the sector by developing and offering customized product paper loans that could take the following forms: Cluster Lending Programmes that identify industry and market peculiarities ( Fidelity Aba Leather Cluster Credit Product Paper, Obosi Industrial Cluster Credit Product,
Credit Product for Medical Doctors and pharmacists, Fidelity Commercial Support Short Term Loans for identified business cluster, etc); develop cheap/low-cost financing packages; timed (medium/long term) equity investment programmes by Angel Investors directly, PE firms, Venture Capital firms, etc.
Others include intervention fund programmes particularly by govt., local and foreign development finance institutions, etc e.g. the recent CBN N220bn MSME Development Fund; the BOI Sugar Fund, the BOI Cotton, Textile and Garment Fund, etc; grants from government and other multilateral development finance agencies; partial Credit Guarantee schemes by government, the CBN, etc to encourage formal lenders to lend to the MSME segment. e.g. the SMECGS launched in 2010 by the CBN, the Agricultural Credit Guarantee Scheme Fund launched in 1977 by govt.
and managed by the CBN., etc; speedily operationalize the mobile collateral registry (CBN) to quickly address collateral issues facing MSMEs in Nigeria and boost access to finance as it will enable the use of moveable assets like vehicles, power generators and other valuable personal belongings, etc to secure bank loans, as well as strengthen the operations of Credit Bureaus (CBN) to help better manage the credit information uncertainty challenge