Reacting to the directive, Head of Research and Strategy at FSDH Merchant Bank, Mr Ayodele Akinwunmi said the policy would bring more monies into the banks. This could bring a boost of more than N1.5 trillion into the economy.
An Intense rivalry: Currently, a rivalry has ensued between several banks seeking to employ diverse tactics in attracting small businesses to themselves.
- Access Bank Plc in its move to comply with this directive, organized a forum for operators in the creative sector.
- Fidelity Bank followed suit by collaborating with PricewaterhouseCoopers (PwC) to provide funding for SME operators.
- United Bank for Africa (UBA) held an entrepreneurial fair in Abuja.
- First Bank of Nigeria Limited and First City Monument Bank have intensified their reward schemes to boost their market share in the small business market in recent weeks.
- Heritage Bank organised various entrepreneurial and talent hunting initiatives.
This trend will continue and possibly intensify in the coming days as the deadline draws closer.
What this means: Banks are doing everything possible to maintain a very healthy relationship with Medium and Small Enterprises (MSMEs) in order to collectively raise up to N1.5 trillion that can be used to develop the economy.
Reacting to this new frenzy, the Director-General of Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, acknowledged that the banks have been doing quite a lot.
“The bigger challenge has to do more with the environment in which the SMEs are operating. Firstly, many of the SMEs are not prepared. For them, they think you just walk up to the bank and collect the money, which is a major bottleneck.
“Then, the risk environment, which is not in the hands of the banks, is also a problem. If businesses are operating in an environment where there are too many challenges, it will be difficult for them to operate profitably and that affects the capacity to repay their loans.”
A Nairametrics report stated that this policy was brought about based on the desire to create a conducive and enabling environment for businesses to thrive, as well as formulate goal-oriented policies to make the country an economic hub.
However, Muda Yusuf said the banks would also need to be creative in how they access the SMEs.
“We should also have a good data bank for the profiling of SMEs, and they should make better use of the credit bureau. They should be able to take more risks and not just to sit in the comfort zone of not wanting to take any risk at all.”