Keystone Bank: Promoting financial inclusion through empowerment of SMEs

Globally, access to finance is a critical success factor in the growth and development of micro, small and medium enterprises (MSMEs).

Financial inclusion on the other hand is the availability and equality of opportunities to access financial services. It helps individuals and businesses to access useful and affordable financial products and services that meet their needs.

Available statistics show that in developed countries, MSMEs are the major drivers of growth in their economies. The existence of an environment that is conducive to doing business is very important in this regard and partly responsible for this development in developed countries.

In Nigeria, Africa’s most populous nation, the MSME sector contributes 50 percent of the GDP and has provided over 48 percent of all employment opportunities in the country, according to the United Nations Industrial Development Organisation.

However, many of the 39.6 million businesses have been struggling to survive in recent years owing to the fallout of the COVID-19 pandemic, the Russia-Ukraine war, petrol subsidy removal and the naira devaluation.

Small business operators have been grappling with a combination of issues, including poor power supply, rising borrowing costs, soaring inflation, restrictive economic policies, foreign exchange volatility and tax multiplicity.

According to the Small and Medium Scale Enterprises Development Agency of Nigeria, 80 percent of SMEs in Nigeria fail before their fifth anniversary due to harsh economic environments, lack of access to capital, and poor business practices, which have stunted the growth and transition of micro-businesses.

“There are obstacles in the business environment that act as constraints to the survival of business in the nation, despite the economic expansion and the possibility for economic prospects,” it said.

Another recent report showed that over 75 percent of small firms in the country were affected by rising cost of inputs, while half of them faced fluctuations in demand.

In examining small businesses in low-income neighborhoods of developing countries, the report found that, among firms tackling increased input costs, the majority, 48 percent utilized savings, while only three percent opted for loans.

That is why in order to chart a course towards analysing the barriers that MSME face in the country, Keystone Bank Limited, one of Nigeria’s leading lenders has continued to expand its support for MSMEs across the country.

The bank has embarked on several initiatives to train SMEs on financial literacy and bookkeeping to enable them take control of their financial future and tap into the opportunities in the financial industry.

Keystone Bank’s SME financing strategy is delivered through a multi-faceted approach that includes robust business advisory, practical handholding and guidance of aspiring and existing entrepreneurs to building sustainable businesses.

The bank’s SME package leverages partnerships, value add offerings, and cost saving banking services to support its customer’s business growth.

For instance, the employees of the bank in June through its initiative tagged, ‘The Keystone Women Empowerment Programme’ donated grinding machines to over 600 women across Nigeria alongside a cash token to tackle unemployment.

The first set of the women who received the support were drawn across four cities in the country, namely Abuja, Calabar, Asaba, and Port Harcourt.

According to the technology driven bank, the grinding machines will enable the beneficiaries to improve productivity, build their customer bases, and increase their income levels while the cash will help them to support their businesses.

“We are thrilled to witness the transformative impact of the Employee Volunteering Scheme initiative. By providing women with the necessary tools and support, we are not only empowering them but also contributing to the economic growth of the communities we serve,” Izore Bamawo, group head, marketing & Corporate Communications at Keystone Bank, said.

She added that the scheme is an integral part of the bank’s corporate social responsibility strategy which encourages the employees of the bank to be involved in voluntary socially impactful activities.

Again, the bank’s Women Economic Empowerment Committee recently partnered with Whispering Hope Africa Initiative (WHAIafrica), a capacity building organization to improve the lives of female owned Micro, Small, and Medium Enterprises in Mbaise, Imo state.

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“The programme is aimed at providing practical support to hard-working women in the community by enhancing their entrepreneurial skills and economic prospects,” Helen Maiyegun, directorate head, Lagos and West at Keystone Bank, said.

She said the collaboration between the Bank and WHAIafrica exemplified the dedication of the bank to promote sustainable economic growth and establish a favorable atmosphere for women to flourish in their individual businesses through the integration of financial literacy and entrepreneurial expertise.

“As the women embark on their entrepreneurial journey, armed with newfound knowledge, skills, and financial support, their success will serve as a testament to the transformative power of partnerships and community-driven initiatives.”

The women were equipped with interactive and practical comprehensive training on financial literacy and insights to effectively manage their finances and foster sustainable business growth. They were also given money to upscale their businesses.

Last year, Keystone Bank awarded three business owners with N9 million in its Startup Advantage programme to tackle unemployment and encourage entrepreneurs in the country. The programme which was in partnership with Kleos Advisory, a consulting firm in Nigeria, created an opportunity for innovative SMEs and tech start-ups to connect with potential investors, tech thought leaders and hear their success stories first-hand, vis-a-vis the knowledge and skills needed to fast-track their businesses to the next growth phase.

The Bank kept 30 MSMEs and startups through a three-month investor readiness programme designed to have groups as well as one-on-one mentoring and coaching sessions.

The three successful participants who won N3 million grant each to support their business operations were Oluwatobi Oyetimein (XDCManufacturing), Uche Udekwe (Natal Cares) and Chioma Ukpabi (Kahdsole Designs).

“The young entrepreneurs were thinking outside the box to provide innovative solutions to prevalent issues in the country,” Anayo Nwosu, Group Head, Retail, SME, and value chain at Keystone Bank said.

He said all the participants were winners as they all had innovative products and services for the market. He added that the vision of the bank was to impact 200 startups annually and up to 1,000 startups in the next five years through the programme.

“As you know, capacity building remains key for the growth and development of SMEs, because SMEs in every part of the world are the livewire of the economy.

“That is why as a bank, we shall continue to lend our support towards the growth of the sector,” he said.

The bank has also empowered 40 Nigerian youths by enrolling them on a digital skills training programme.

The programme tagged ‘The Keystone Bank Digital Skills Training Programme’ was hinged on the bank’s Corporate Social Responsibility pillar which is youth empowerment to address the current need for job creation and the acquisition of the skills of the future.

The beneficiaries who are university undergraduates, National Youth Service Corps members and fresh graduates were impacted with digital skills consisting of web development, designs and digital marketing.

Apart from empowering women and businesses, employees of the Bank trained over 1,600 students across 37 schools in financial literacy.

The students were imparted with knowledge and skills to improve and manage their finances at an early stage. They were also taught the importance of earning money and also the guidelines to adopt a saving culture.

The bank believes that financial literacy is important at an early stage and that the initiative will help children imbibe a saving culture while making responsible financial choices and decisions thereby affecting their future positively.

In 2012, Nigeria developed its first financial inclusion strategy with the target of bringing up to 80 percent of its population into the financial system by 2020, according to Enhancing Financial Innovation and Access (EFInA), a financial sector development organisation.

But the country failed to meet the target as financial inclusion grew to 64.1 percent in 2020 from 63.2 percent in 2018.

The World Bank’s 2021 Global Findex report also showed that Nigeria’s banked population increased by 15.6 percentage points to 45.3 percent. This implies that almost 56 percent of Nigerians are unbanked.