Targeting MSMEs empowerment, the Heritage Bank way

In compliance with the directive by the Federal Government and the Central Bank of Nigeria (CBN) to Nigerian money deposit banks to  assist the development of Micro Small and Medium Enterprises (MSMEs) in Nigeria, Heritage Bank, smarting from its acquisition of Enterprise Bank, has again reaffirmed its commitment towards broadening  the scope of MSMEs in the country. Our Correspondent was at a round table meeting organised by the bank on MSMEs. He reports:

Heritage Bank has again re-affirmed its business principle to empower more Micro, Small and Medium Enterprises (MSMEs) in Nigeria. This, it said, is in addition to many of the similar small businesses it has helped financially since it began operation.

 Managing Director of Heritage Bank, Mr. Ifie Sekibo

The Group Managing Director, Heritage Bank, Mr. Ifie Sekibo stated this at the Round Table Discussion and MSME Success Stories with the theme: ‘The Economic Outlook-What Future for MSMEs in Nigeria? He was joined by other experts who brain-stormed on  ways forward for the Nigerian SMEs.

As part of the bank’s commitment to empower the SMEs, Sekibo said, led to the launching of SMEs Clinic that will help small businesses address challenges associated with setting up businesses while mitigating the effect of certain decisions that may be taken.

Represented by Mary Akpobome, who spoke extempore during a panel discussion and noted that the clinic was established as a result of the gap left by financial service providers in failing to provide fresh ideas, solution based strategies and specialized service packages to small businesses.

He said although the SMEs have proved to be the crucial engines of industrial growth in developing economies like Nigeria, it is necessary to create strategies that can withstand the dynamics of the changing business environment rather than focusing on funds generation.

He said since the SMEs Clinic was established, many small businesses have sprung up and successfully on operation due to, not only the funding, but business advisory it freely offered, adding that financing is not the only problem SMEs face, but other necessary inputs.

He enumerated business built on enduring business platform, and business model among others stand the chance to get loan from the bank.

“Heritage Bank was established as part of the effort to fill the gap left by financial service providers in failing to provide fresh ideas, solution based strategies and specialized service packages to small businesses. We pay a lot of attention to SMEs

“Financing is not the problem, but the other business inputs. Heritage bank has raised a lot of small businesses with SME Clinic. With it, we have built a lot of enduring organisations; we have done more that advisory than money. For us to extend loan to you to finance your business, you must have good business model,” he said.

The industrial experts in MSMEs in the Nigeria’s real sector at occasion unanimously agreed that for the nation to have economic breakthrough as envisaged in the present dispensation of availability of investible funds from the government, the vision of sustainability in business should be taken as paramount by the operators.

Other experts from the financial institutions, business organisations and academia who spoke  at the event in Lagos emphasised the relevance of booming SMEs to take the centre stage as a major driver of the economy as well as contribute immensely and filling the dollar drought gap being experienced in the country brought about by the fallen prices of crude in the international oil market.

A senior lecturer, Lagos Business School, Dr. Doyin Salami, who opened the floodgate of speeches in his tagged presentation: ‘2015 Economic Outlook’ said the SME operational strategies in 2015 would be three-pronged on Election, Transition and Normalcy.

Salami, said who wins the present presidential election is not the main issue but the outcome of the election. He maintained that the positive outcome would lead to the smooth transition and expected normalcy in the socio-economic of the country.

He said presently, the dream of running the economy on a private-driven platform is being threatened by insecurity, uncertainty in an election year and the widening threats in communal clashes across the country.

He caution against continued emphases placed on oil as major source of foreign exchange to Nigeria, but urged the government to embrace industrialization by creating policies that would help leapfrog the Nigeria’s SME sub-sector, identified as backbone of any nation, both the industrialized and unindustrialized.

Presently, there are over 17 million SMEs in Nigeria.

He expressed fear that Nigeria is under fiscal break-even threat with international crude price below $60, insisting that for “Nigeria to balance the economy and be able to pay salaries both at the federal and states levels, the price of crude should hover between $65 and $75 per barrel.”

According to him, “there is a fundamental problem in 2015 and beyond if the down south movement in crude oil persists caused by oil glut. The development has led to the 2015 budget proposal of which the recurrent expenditure must be maintained at the expense of capital expenditure. Even some states government currently cannot be able to pay their workers’ salaries.

“Nigerians should no more live life as they wish but as they see it.”

Lead Consult ,ThistlePraxix, Dr. (Mrs.) Ini Onuk who spoke on ‘MSMEs and Sustainability’ said any entrepreneur who wants to succeed must identify opportunity, be creative, daring, and risk taking.

She stated that, entrepreneurs are men and women of action who are courageous, alert and sensitive to environment and possess ability to create visions concerning the business environment. She asserted that, the present high mortality rate of small business is awful to contemplate and constitute danger to the entire economic system. She said such development represents serious financial pressure on the nation’s economy as well as a waste of valuable resources.

With the current lull in the business activities as a result of the 2015 election year the business owners should always consider challenging situations and be prepared to meet them pre-planned strategies.

She said the trend where ownership stems mainly from the fact that most SMEs are family businesses structured along sole-proprietorship or partnership is no more in vogue, but needed expansion in terms ownership and decision making.

As a consequence, she argued that managerial decisions are usually at the mercy of the key owner who in most cases lacks basic managerial skills, qualities and culture to manage a business successfully.

This, Onuk regretted, also has effects on the management structure and employees-employer relationship.

SMEs should learn creative ways to manage difficult times, example the current condition occasioned by the forth coming 2015 general elections, adding that SMEs owners should always be prepared for unpredictable business situation.

Also, she said, SMEs should be surrounded by strong support network of trusted professional contact and close relations, especially the consultants for proper advise.

She stated  that the entrepreneur should always have a back up business plan for new products and services

She concluded that there is no doubt that SMEs can be a source of development and an engine of growth as the case with Asian countries and America. She maintained that SMEs should therefore take their place in the economic policy priority of government in Nigeria.

Mr. Waheed Olagunju, Executive Director, (SME), Bank of Industry who spoke impromptu as a panelist member on:”‘Opportunity and Growth Strategies Available for MSME 2015”, highlighted some of the hindrances to easy access to available government’s intervention funds

For him, it has become clear that the lack of trained manpower and management skills constitute major challenges to survival of MSMEs the banks observed before granting loans to borrowers.

He also added that inefficiency in overall business management and poor record keeping is also a major feature of most SMEs the bank put into consideration before granting loans.

According to him, the general requirements for accessing loans in the development bank include; having a well-articulated business model, which should have about four sections. The first and second requirements require that the BoI know the business plan the applicant offers and his / her target market.

Third, the applicant must convince the bank of his/her value composition, that is, why people should buy his /her product(s). The applicant should be able to say how he/she intends to create the value proposition, Olagunju said.

Furthermore, the applicant must be able to articulate personnel requirements and identify markets for the products he/she wants to sell.

He said, “a lot of applications that come to BoI do not meet the standards,” while explaining why applicants need to take full advantage of the N220 billion Intervention Fund for SMEs scheme in Nigeria to improve their lives and the economy.

In order to cut down on the rate at which applications are rejected and ensure that applicants’ business plans meet the standards, the development bank is also coming up with the Business Support Fund (BSF), involving individuals who themselves are experienced in finance and articulation of business plans.

“The BSFs will receive applications from SMEs, look at them and then help repackage them so that by the time they get to BoI, they would have met the criteria of a bankable application,” Olagunju said.

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