Fidelity Bank 60:60 initiative to open-up Nigeria’s MSME space

The lender intends to collaborate with fund providers within and outside the country to organise a one-day funding initiative for Micro, Small and Medium Enterprises (MSMEs) across three cities in Nigeria that will connect 60 MSME founders to 60 fund providers, writes BALA AUGIE

Despite the huge potential of the Micro, Small and Medium Enterprises (MSMEs) sector to create employment opportunities for Nigeria’s youth population, the sector remain largely bedeviled by a number of problems with limited financing options being one of the main drawbacks faced by MSMEs.

In Nigeria, MSMEs have continued to contribute their fair share to the growth of the economy employing over 80 percent of Nigeria’s 90.5 million working population, which contribute 48 percent to Nigeria’s GDP and constitute over 80 percent of registered exporters in Nigeria.

As part of efforts to bridge the funding gap and other attendant issues faced by MSMEs and in continuation of its support for the growth of the sector, Fidelity Bank has reiterated its willingness to collaborate with fund providers within and outside the country to organise a one-day funding initiative for MSMEs across three cities in Nigeria.

Therefore, the bank has concluded plans to connect 60 SME founders to 60 fund providers at the forum themed “Entrepreneurship Meet Capital” holding in Lagos today, 7 August. Fidelity Bank will also hold the conference in Port Harcourt, and Kano in the last quarter of the year, and first quarter of next year respectively.

Fidelity Bank will be giving out a total of N12 million (across three locations) in grants to MSMEs who will emerge finalists in a competition at the event dubbed ‘Fidelity SME Funding Connect’.

“This initiative shows that it is a sector we cannot ignore. The biggest problem of SMEs in the country is funding before other factors like poor infrastructures, multiple taxation, poor capacity, and skills to do what they are supposed to do. Fidelity Bank has over the years provided funding,” said Nnamdi Okonkwo, the MD/CEO of Fidelity Bank Plc, at a recent press conference where he stated that MSMEs are the engine of any growing economy. Okonkwo was represented by Nneka Onyeali-Ikpe, the executive director, Lagos & South-West, Fidelity Bank,

Fidelity Bank SMEs Connect Series will be anchored by PWC, a professional audit and consulting firm. The event is planned to hold in major commercial and policy centres in the country featuring 60 founders, 60 fund providers with 3,000 participant’s starting from Lagos on 7 August, Port Harcourt in fourth quarter of 2019 and Kano in first quarter of 2020.

“We anticipate that at the end of the fair, SMEs would have received access to funding from local and foreign funders”, said Osaigbovo Omorogbe, the divisional head, managed SMEs of Fidelity Bank while giving an overview of the SME Funding Connect.

According to Omorogbe, the event seeks to deepen the conversation around funding for SMEs amongst all of the other issues that SMEs currently face in the market such as policy inconsistency, poor managerial/entrepreneurial skills, poor record keeping, low technology leverage, and limited access to export markets among others.

For many SMEs/MSMEs playing in the Nigerian financial ecosystem, access to cheap and sustainable loan has been the panacea for business sustenance. Chidiebere Nwankwo, a Lagos based entrepreneur that produces a wide variety of plastic products. He recounts his experience and lessons learnt in his entrepreneurial journey and how his business was forced to close for his inability to scale-up after a large client placed a major order for his products.

Nwankwo needed a loan to purchase an advanced equipment to fulfill the large order, but it was 2017 and the country was still grappling with one of the worst economic recession in 29 years and he could not secure the funds. “I learned firsthand how access to finance can spur a small business and how the lack of funding can kill an entrepreneur’s dream”, said Nwankwo reiterating how access to funding can stand as challenge to the MSMEs sector.

In collaborating Nwankwo’s plight of accessing fund, Chijioke Ugochuckwu, the executive director, Shared Services and Products of Fidelity Bank, while featuring on ‘Fidelity SME Forum,’ on Inspiration FM recently, pointed out that apart from well-known infrastructural challenges SMEs face, the number one feedback the bank had received was funding constraints.

This according to Ugochuckwu was a critical factor to the success of any business. “Fidelity Bank is driven to help SMEs get capital which is a huge part of what we do. We are clear in our minds that due to the fact that SMEs produce 50 percent of the country’s GDP and accounting for about a third of the eligible work force; impactful programmes targeted at SMEs would go a long way to improving and sustaining our economy.

“We have invested a lot of resources into capacity building as we have had 200 episodes of the Fidelity SME Forum the radio programme, so when we are through in Lagos we are taking it to Uyo and Ibadan in a few months,” said Ugochuckwu.

The bank has reiterated its commitment to providing long-term funding for MSMEs through its funding partners including private equity firms, Venture Capitals (VCs) and Angel Investors worth over $1 billion.

More importantly, Fidelity Bank has given out loans to Nigerian businesses over and above the latest 60 percent limit Lending to Deposit Ratio (LDR) set by the Central Bank of Nigeria (CBN).

Making the revelation on the weekly live radio Fidelity SME Forum, Joshua Gbolahan, the chief operations and information officer (COIO), disclosed that the feat is achieved with minimal Non-Performing Loans (NPLs).

According to him, Fidelity Bank’s policy of structured approach under a managed SME team which is driven by strategic capacity building powered financial advisory model to tame incidences of NPLs. “Our NPLs are below six per cent, with our cost of risk below one per cent at 0.5 last year. This is because we do this lending on a very structured manner and evaluate the sector we lend against our defined limits. Currently, we are supporting our risk management framework with a lot of tools from digital perspective,” said Gbolahan.

Gbolahan further averred that Fidelity Bank is working with the Development Bank of Nigeria (DBN) in riding on the CBN’s development financing programmes to grow the activities of Small and Medium Enterprises (SMEs).

“If you look at the bank in the last five years, every single year, even during the recession, it has grown its loan books. Even in the face of currency devaluation, it has grown its loan books and I can assure you that the bank will never stop lending,” said Gbolahan.