Adesola Adeduntan – First Bank CEO

Over the years, Small and Medium Enterprises (SMEs) have been recognised as the bedrock of every nation’s economy. In this regard, First Bank Nigeria Limited has been in the forefront of championing the course of small business owners’ access to finance in the country, writes NGOZI ONYEAKUSI

The success of an economy is largely dependent on how successful the SMEs are. And the success of the SMEs also depends on the willingness of the government, commercial banks and other institutions to give their support.  SMEs in Nigeria, according to  Small and Medium Enterprises Development Agency of Nigeria (SMEDAN)  account for 96.7 per cent of businesses, 87.9 per cent of employment, and contributes 50 per cent to Nigeria’s gross domestic product (GDP). Unarguably, this places SMEs at a pivotal position for driving the growth and development of Nigeria’s economy.

Unfortunately, are plagued by lack of access to finance. It is obvious that fixing SMEs finance challenges will mean solving Nigeria’s unemployment which stands at 33.3 per cent.  The implication is that one-third of Nigeria’s labour force has no work to do. Since SMEs account for 87.9 per cent of Nigeria’s employment, it therefore suggests that unemployment in Nigeria is largely occasioned by frictions and dislocations experienced by SMEs. Hence, tackling the challenges faced by SMEs is pertinent to solving the issue of rising unemployment in Nigeria.

According to World Bank, while SMEs create seven out of 10 jobs in emerging markets, access to finance has remained a key constraint to its growth.

Reports have shown that SMEs’ challenges in accessing funds could be traced to inadequate access to financial institutions and  education, skills, experience of owners/managers, high  interest rates and gender discrimination, among others.

Notably, it is imperative to mention that the Central Bank of Nigeria (CBN) through its intervention programmes has been in the business of assisting SMEs get access to finance.  But these interventions are insufficient as government cannot do it all alone.

It is on this note that First Bank of Nigeria Limited, one of the largest financial services institutions in not just Nigeria but Africa as a whole has taken it upon itself to support small business owners get access to finance through loans and finance options

Established in 1894 and headquartered in Lagos, Nigeria, First Bank has over 758 business locations spread throughout 10 countries.

“We believe that Small and Medium Scale Enterprises are key drivers of the economy, which is why we have designed these loans facilities to support the growth of your business with required funds”, said First Bank.

Speaking at the unveiling of FirstSME Account, the chief executive officer of the bank, Dr Adesola Adeduntan said: “FirstBank is delighted to unlock several opportunities for SMEs to thrive. Our FirstSME account is one of the numerous opportunities designed to empower SMEs to continually drive impact as the backbone and contributors to employment and economic growth.

Also speaking during one of the SMEs business clinics, the immediate past deputy managing director of the bank, Mr. Gbenga Shobo, said: “At FirstBank, we are proud of the giant strides we have taken over the years towards enhancing the SMEs for their businesses to thrive, have a fair play in the market and contribute to the gross domestic product of the country.

“We remain the trusted financial partner of SMEs and reiterate our resolve to be known as the brand that enables their success; much the same way that we have been for over 125 years enabling Nigerians and the economy at large.”

In support of owners of SMEs operating in the education sector, FirstBank, in partnership with the Lagos State Employment Trust Fund (LSETF), set up a matching fund scheme of ₦5 billion LSETF-FirstEdu Loan.

Speaking at the official launch of the collaboration in Lagos in September 2020, Adeduntan said the bank is aware of the contribution of education in the growth of the economy.

“At FirstBank, we recognize the indelible role played by the education sector in the growth of any economy and this underscores our partnership with Lagos State Government for continuous development of the education services in Lagos State and the nation as a whole.

“The commitment by the Lagos State Government – including this partnership – to enable schools is quite commendable as this will mitigate the challenges caused by the lockdown on the education sector following the COVID-19 pandemic,” he added.

Years back, FBN Limited collaborated with Microsoft 4Afrika to support SMEs.

The collaboration seeks to build the capacity of local SMEs and accelerate their digital transformation, by providing them with exclusive and tailored non-financial solutions.

The bank said the partnership with Microsoft would enable it (the bank) to deliver a portfolio of non-financial solutions to its SME customers.

“We have over the last 125 years supported SMEs in building their businesses, whilst contributing to the national economy. This partnership is a landmark step in our quest to leverage the influence of technology in businesses, especially in today’s digital age,” it said.

With the partnership, the bank’s customers can buy Microsoft products at discounted rates in local currency (naira), as this would aid technology adoption, skills and capacity development among SMEs in Nigeria.

As the world becomes technology-driven, FBN its continuous stride to build capacity for SMEs, urged SMEs to take advantage of the various social media platforms to grow, promote and build sustainable businesses.

Speaking at a recent event, the bank’s head of marketing, Ms Chinwe Bode-Akinwande said ‘Leveraging social media for business success: Best practices and strategies for building your brand and growing your audience,” webinar said: “No matter how small your business is, you need these tips to create a content strategy- define your target audience and identify them, their interest and the type of content they consume. Define your content marketing objective, and determine what you want to achieve.

“Choosing your content formula will allow you to know what type of content you want to create and also spying is allowed, research the latest trends going on social media platforms. Doing all of these will keep you relevant in your own space and have a voice as it is very important in creating content,’’ she said.

First Bank’s efforts at promoting SMEs growth

First Bank of Nigeria has remained at the forefront supporting the growth of SMEs through initiation of different loan options targeted at financing the specific needs of SMEs.  Some of them are:

Contract finance

This enables businesses to execute large contracts — awarded by reputable organizations. Here, First Bank can finance 70 per cent of a contracts value. Loans over N50 million will need collateral. Funds are advanced for a maximum of nine months.

Revenue loans and overdraft

First Bank’s overdraft facility gives business owner access to money — over and above what is actually their account. Borrowing limits and loan tenors are all pre-defined. A great backup source of funds to have — for unexpected expenses.

Secured term loans

With this secured loan facility, one can get access to the cash needed — to execute capital projects, or simply to grow. A maximum of N40 million can be credited to the account holder. Repayments can be made over three years.

Import finance

Businesses involved in the importation of raw materials or finished goods, can consider import financing. Credit facilities are made available through a number of different finance products — including bills for collection and letters of credit.

Oil and gas contract finance

With this credit facility, Nigerian oil and gas companies can get access to much needed funds. Money is released for the purposes of executing specific contracts. Up to 70% of the cost of execution can be borrowed.

Cement distribution Finance

Distributors of cement products can benefit from this scheme. The loan tenor is flexible, as to is the collateral required.

FirstGem funds

The FirstGem Fund Scheme is FirstBank’s gender support single-digit loan for women in MSMEs, to enable them meet their working capital and asset finance needs.

Bonds and guarantee

The Bonds and Guarantee product is targeted at FirstBank customers who are contractors to major companies that require guarantees (i.e. comfort/security) from a bank on their contractors.