Going beyond traditional banking to financing SMEs, entrepreneurship

The rising unemployment in the country with the attendant low standard of living may have led to a renewed interest in Small and Medium Enterprises (SMEs); entrepreneurship development and financing by the banks as part of their corporate social responsibility.

Of recent, banks are gradually shifting focus from traditional deposit and withdrawal transactions to training, mentoring and financing both young and existing entrepreneurs.

This is as a result of the critical role played by this sub-sector in the economy.

SMEs contribute significantly to improved living standards, bringing about substantial local capital formation; achieving a high level of productivity and capability.

They have also been identified as a vehicle for employment generation and providing opportunities for entrepreneurial sourcing, training, development and empowerment.

In Nigeria, there are over 17 million SMEs according to National Bureau of Statistics (NBS).

A lot of SME operators in the country find it very difficult to effectively play their role due to some challenges which include competition, infrastructure, taxes, accounting, management, marketing, economic, planning and finance. Also, poor economic conditions, which also imply poor finance and inadequate infrastructure, have been identified as the most crucial factors.

To address these challenges, most deposit money banks have designed various products and training programmes that meet the needs of this sub-sector. Sterling Bank Plc is one of the banks that have set the stage to create the next set of people that will develop the country.

Over the last 3 years, the Bank has supported SMEs inclined initiatives with programmes such as the Meet The Executive (MTE), which traces its roots to the first season in January 2014.

The Bank also held the MSME Academy last year in Lagos and is committed to taking it to other parts of the country.

MTE is a social media-led Initiative geared towards encouraging and supporting small businesses and budding entrepreneurs.

“We must go beyond our primary interest, which is profitability. We must see to it that we participate in turning the country around. So, ‘Meet the Executive’ is not about benefit to Sterling bank; it is not about deposit. It is about doing the little we can to put this country on the path of prosperity. We are helping people who are going to contribute to the economy in so many other ways”, Abubakar Suleiman, executive director, Sterling Bank, said.

The bank tries to be different to the extent that it goes beyond training but also to capture fresh graduates through a scheme known as ‘Get Ready to Work’.

“The scheme brings together young school leavers and people who have just finished their NYSC and then, we start to prepare them for work. We moved from ‘get ready for work’ to SME training”, he told BusinessDay.

“So we are trying to broaden the net capture of many people as possible and at the end of the day, get the best among them. We have a partner that follows and mentors them through the entire year. We give them the grant and continue to follow up on them, advise them, and sometimes when they run into trouble, we bail them out. Sometimes, when they need more funding we look at it from a banking perspective, and give them credit or link them to SME fund. For us, it does not start and end with award; the grant is just the beginning of it. Where they become successful, they become life long customers to the banks”, Suleiman said.

HOPE MOSES-ASHIKE