How foreign leasing company defrauded us of $2m – Air Peace CEO

Air Peace's $14m stranded with CBN, 15 planes grounded abroad — Onyema

Ifeoma Okeke-Korieocha Aug 30, 2023

Army officers [Photo Credit The Conversation] (1)

Military officers announce coup in Gabon

MEA Energy deploys SmartPump tech to automate fuel retail across Nigeria

Federal government saves ₦1.83 trillion in two months from subsidy savings

Kano officials in Portugal to study rail systems as the state aligns transport agenda with FG

What to know about $823m Abuja Light Rail project

Cameroon dam opening threatens N700bn CBN farmers’ Loan

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Nigeria’s scarcity’ saga: A grim tale of resilience and government failure

Fuel queues return to Lagos, Ogun, others amid pipeline vandalism

BusinessDay Aug 30, 2023

Long queues for fuel have resurfaced in Lagos and Ogun states, as well as some parts of South-Western Nigeria, as...

Naira rate gap widens as dollar supply stays tight

Hope Moses-Ashike Aug 30, 2023

The exchange rate gap between the official and parallel segments of the foreign exchange market has widened to N150 per...

Nigeria’s youth: Locked out of formal work

Most employed Nigerians work less than 40 hours a week — NBS

Kelvin Okojie Aug 29, 2023

The National Bureau of Statistics (NBS) said that most employed Nigerians work less than 40 hours a week, a figure...

Lagos ranks fifth best African city to live, work - Report

Chioma Onuh Aug 29, 2023

Lagos has been named the fifth greatest African city with a high desire among people to live, work, and invest,...

Beyond the maternal statistics: Turning commitment into action on maternal nutrition

Group intensifies intervention to raise awareness on reproductive, maternal health

Anthonia Obokoh Aug 29, 2023

Pathfinder International, in collaboration with the Federal Ministry of Health (FMOH) has intensified its interventions on self-care to raise awareness...

‘Organisations must embrace technology to advance, revolutionise their businesses’

Anthonia Obokoh Aug 29, 2023

Charles Nwadavid, founder and chief executive, ChaviD Properties Limited, has said that as technology continues to evolve, there is need...

We are removing all obstacles to agric investments,.says Tinubu in Brazil

Tinubu names fresh board and management for NDDC

BusinessDay Aug 29, 2023

President Bola Tinubu has taken steps to bolster the Niger Delta Development Commission (NDDC) leadership by announcing the appointment of...

Calm Down: Rema's song rewrites Billboard's history with one year reign

David Ijaseun Aug 29, 2023

Nigerian music star Rema, also known as Divine Ikubor, has reached a milestone with his hit song ‘Calm Down,’ featuring...

INEC set for Saturday House of Assembly by-election in Taraba

Kogi governorship election results will be transmitted electronically - INEC

David Ijaseun Aug 29, 2023

The Independent National Electoral Commission (INEC) has announced that the results of the upcoming governorship election in Kogi State will...

Why Wike controls the political game in Abuja

Wike reintroduces monthly sanitation in FCT

Godsgift Onyedinefu Aug 29, 2023

Nyesom Wike, minister of the Federal Capital Territory (FCT) has announced plans to reintroduce monthly sanitation, in a bid to...

Nigeria’s tax law delivers early pay gains for workers

Corporate tax slump dims non-oil revenue hopes

Olamide Ologunagbe Aug 29, 2023

Nigeria’s projected 2023 non-oil taxes of N2.43 trillion may be under significant threat as shaky corporate tax in Africa’s largest...

We exclusively focus on SME lending – Auto Bucks CEO Olasukanmi Olaoye CEO, Auto Bucks Lenders Limited, one of the subsidiaries of Alert Group, in this interview with Hope Moses-Ashike, speaks on challenges facing lending to Small and Medium Enterprises (SMEs) and other issues, excerpt. What specific risk management strategy did you implement to maintain portfolio at risk below 1 percent? In our inaugural year of operation, we disbursed over N80 million in loans. The income generated from these disbursements, coupled with the fact that they constitute a healthy portfolio, mitigates any risk associated with our portfolio. Therefore, the revenue derived from fees and charges enables us to generate income without exposing our portfolio to risk. The robust health of these portfolios significantly contributes to the achievement of our income targets. How did you manage costs and operational efficiency to achieve profitability within seven months? To achieve profitability within seven months, we implemented several strategies. Firstly, we focused on securing cheaper funds, as lower financing costs enhance operational efficiency significantly. Secondly, while maintaining competitive pricing, we ensured that our rates were adequate to cover our cost of funds and other operational expenses. Moreover, we kept our management expenses minimal, contributing to overall cost reduction. Leveraging technology was another key aspect of our approach. By deploying advanced technological solutions, we streamlined various business processes. For instance, our electronic collection system eliminated the need for manual cash transactions, enhancing efficiency and reducing the need for field officers. Through these measures, we optimized operational efficiency and effectively managed costs, resulting in positive outcomes within the initial six months of operation. You mentioned disbursing approximately N80 million; how many individuals or businesses were beneficiaries of this loan? We exclusively focus on SME lending. To date, we have successfully disbursed loans to over 1,000 SMEs. This achievement underscores our deliberate commitment to positively impact the Nigerian economy through targeted support for SMEs. Since our inception, every loan disbursed has been directed towards SMEs, reaching a total of over 1,000 beneficiaries. How do you ensure that the beneficiaries are utilizing the loans provided to them for business growth and to contribute to the economy? The primary way we ascertain the proper utilization of the funds we disburse is through their repayment behavior. If beneficiaries have diverted the funds and not invested them in their businesses, it would reflect in their repayment patterns. Additionally, we implement rigorous monitoring mechanisms once the loan is disbursed. This ongoing monitoring allows us to assess the impact of the funds on their businesses and on the economy as a whole. Furthermore, maintaining a positive credit appraisal is crucial. A strong credit record not only facilitates future loan requests but also enables beneficiaries to potentially access larger loan amounts. Therefore, we emphasize the importance of maintaining a favorable credit history. When you mention that your portfolio at risk is below 1 percent, does that imply that you do not encounter other challenges? The strategy we’ve employed acknowledges that some clients may face difficulties in repayment, particularly during certain business cycles such as festive or fasting periods. For instance, clients in the fast-moving consumer goods (FMCG) sector may experience reduced returns during fasting periods due to decreased consumption levels. Our proactive monitoring of these clients helps mitigate potential challenges and aids in the recovery of funds. As previously mentioned, we exclusively provide loans to SMEs with a minimum of 12 months of consistent business operation and cash flow. This ensures that our borrowers have a track record of financial stability, as evidenced by their bank records. We do not extend loans to startups but rather focus on established businesses with a proven track record. Our credit analysis process is thorough and detailed, assessing the borrower’s financial history and ability to repay. For instance, if a borrower has transacted less than N500 million in the past 12 months and seeks a N5 million loan, we evaluate their monthly turnover to ascertain their repayment capacity. This rigorous process ensures that loans are utilized effectively and that borrowers can comfortably meet repayment obligations. Additionally, we implement regular monitoring to ensure that funds are used appropriately and not diverted for non-business purposes. We are mindful of seasonal factors, such as festive periods, to prevent misallocation of funds. Our commitment to responsible lending practices and diligent monitoring safeguards against potential diversions and ensures that our support truly benefits the MSMEs we serve. What are some of the other challenges your business faces? In the current macroeconomic landscape, businesses encounter various hurdles. The high cost of operation is a prominent issue, compounded by volatile market conditions. Fluctuations in prices, especially due to foreign exchange (FX) challenges, pose significant obstacles. Even after procuring goods, market dynamics can swiftly impact prices, leading to uncertainties. Moreover, macroeconomic indicators like inflation rates, currently at 33.2 percent, further complicate business operations. Elevated inflation affects purchasing power and overall business viability. Additionally, the cost of funds presents a considerable challenge. While securing financing is crucial, prevailing market conditions have increased the cost of capital, with investors demanding higher returns on their investments. Despite these challenges, we actively seek solutions to mitigate risks. This includes sourcing affordable and stable funding options while prioritizing long-term relationships with fund providers. We also recognize the importance of stable economic policies in fostering a conducive business environment. Efforts by the federal government and the Central Bank of Nigeria to stabilize the economy, particularly in areas like FX markets, are crucial for SMEs to plan and navigate business operations effectively.

Financial inclusion impacted GDP positively in Q2, says CIBN

Eniola Olatunji Aug 29, 2023

Ken Okpara, president of the Chartered Institute of Bankers of Nigeria (CIBN) has said that the growth in contributions of...

Enugu backs ‘hands on’ learning at ESUT with N1.6b pledge

Enugu: Mbah unveils $2.1bn energy, transport, agro-allied projects to stimulate economy

Chuka Uroko Aug 29, 2023

The Enugu State government is set to unveil a $2.1 billion (N1.6 trillion) projects to stimulate the economy of Nigeria’s...

Ponzi: SEC seals Stockmatch over illegal investment activities

Iheanyi Nwachukwu Aug 29, 2023

Nigeria’s Securities and Exchange Commission (SEC) on Tuesday sealed the premises of Stockmatch Investments Limited in Maiduguri, Borno State for...

-How Nnamdi Kanu hid radio transmitter in household items — DSS

Begging for my freedom will be an insult to the memory of late Pa Amechi - Nnamdi Kanu