In an interview with Segun Akintemi, CEO, Page Financials and Sunkanmi Ola, Chief Operating Officer of Syracuse Africa, they both shed light on the challenges facing Small Medium Enterprises in the country and how they have been able to overcome these challenges so far.
Name of Company: Page Financials
Q: Can you give us a brief introduction about yourself and company?
R: Thank you. My name is Segun Akintemi, CEO, Page Financials. I consider myself passionate about life, family and creating value for the benefit of many. This passion has driven several of my antecedents since starting Page 6years ago and through my banking career which spans over 31 years. Although I have a background in technology, I am service oriented and find that the delivery of excellent service to customers, exemplary leadership and optimal returns to stakeholders are important elements of growth and sustainability in Business. These have become my pillars as an entrepreneur. Page Financials represents empowerment and opportunities to our customers and we hope to extend this to other Nigerians. We realize that access to finance is sometimes the difference between a great idea and its actualization, whether it is getting a post-graduate degree, moving homes or expanding a business; we are here for well-meaning Nigerians who can achieve these targets and settle their obligations over a convenient period of time.
At Page Financials, the focus is offering our products through the most innovative, convenient and speedy platforms and processes. Customers can easily get access to finance under 3hrs by applying through our website or mobile app, sending an email, calling our contact center or even visiting the office. We understand that people sometimes make financial decisions that require an urgent need for cash, and we ensure they get what they need, right when they need it. We offer two categories of loans; personal loans to salary earners and business loans to support Small and Medium Enterprises (SMEs). We offer loans of between N200k to N5 million to salary earners in Lagos and Ibadan. Subject to approval, disbursement time is in less than 3 hours. We also have an investment plan where investors can get up to 20% ROI depending on the amount they invest with us and the tenor. Our customers also use our mobile app to pay bills and transfer money to any bank in Nigeria at a zero-naira service charge, this means you get to save transaction charges any time you transfer money or pay bills with our app. We are one of the first fintech companies to embrace the ₦0 on transaction charges while performing financial operations.
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Q: How is the Nigerian business environment impacting your SMEs?
R: SMEs account for a large proportion of the total employment growth in many countries. In the OECD economies, SMEs and micro enterprises account for over 95% of firms, 60-70% of employment, 55% of GDP and generate the largest share of new employment. In the case of developing economies, the situation is not very different. For instance, in Morocco, 93% of firms are SMEs and account for 38% of production, 33% investment, 30% export and 46% employment. In Nigeria, SMEs contribute about 76% of the workforce, with contribution to GDP at about 50% and contribution to exports at 8%. The SME business culture in Nigeria is entrenched in our values as a people, although now gradually evolving beyond societal idiosyncrasies and adopting global best practice in certain areas. In the SME sector, we still grapple with issues such as accountability, timeliness, short-term focus, gender bias etc. and these limit the growth opportunities of businesses especially when combined with prevailing infrastructure and regulatory constraints. However, there are many reasons to be optimistic as Nigerian Entrepreneurs are becoming more aware of the need for structure and policies that guide business operations. The fintech community is somewhat peculiar, a lot of the inspiration and activities that happen in that space are based on global trends, hence, there is more adoption of creative and innovative values which are required to survive and flourish in the sector. More so, many of the players in the field are either millennials or have a large portion of their teams as millennials who are more exposed to the “global village” and pursue goals beyond the dictates of their local environment. These factors have played a major role in the rapid growth of the sector and it is without doubt that the Nigerian fintech space will be competing globally in the very near future.
Q: What are the most critical problems SMEs face in doing business in Nigeria inrelation to your industry sector?
R: The industry has evolved well although a lot of companies have gone under in the process based on their focus, target market and many other factors. The government is trying to encourage investment in the sector as one of the major issues in this space remains funding. The government has been very proactive with the provision of N220B MSME fund focused on the development of SME’s disbursed through Microfinance Banks. The Bank of Industry (BoI) has also been active in lending to the real sector thus supporting its growth and development. These are the factors that are going to help us in terms of growth. But there is still a lot more to be done, particularly in terms of regulations. The Regulatory Framework is evolving in line with the realities of today, with the aim of building more resilient and robust financial institutions. So, I see the industry evolving and developing as the DMBs have in the last decade, the ease of accessing financial services has also increased significantly with the use of ATMs, POS’s and the USSD technology which does not require smart phones. This has further propelled growth in the sector but the potentials and opportunities remain huge and can only be fully tapped with very innovative thinking.
Q: Can there be any end to the constraint of financing for SMEs?
R: One of the biggest measures of growth for an economy is your consumer credit ratio to GDP. If you look at the advanced countries, their rates are averagely above 70% while Nigeria is barely 20%. If you do not drive consumer credit which in turn grows the economy then we can’t witness improvement in our GDP growth. What we should be doing as an entity is to identify how to further empower and enrich our consumer credit culture so our SMEs have access to credit and the average Nigerian too. Naturally, it is a way of infusing growth and driving the velocity of money, which is what propagates the growth of GDP.
Q: Do you think the existing policies and regulations are enough to ensure the proper functioning of the SMEs in Nigeria in relation to your industry sector?
R: The government is putting in efforts to ensure that SME businesses in Nigeria in general function properly; however there is still so much room to do more.
Q: If No, what policies and regulations do you propose should be implemented/ introduced?
R: Government should intensify intervention programs that will aid growth of MSMEs by making affordable financing options available. Additionally, more attention and support should be given to knowledge acquisition through access to requisite trainings and apprenticeship systems based on global standards. Local businesses now have to provide goods and services that compete with foreign products. With international exposure through robust trainings and apprenticeship models, these local businesses can learn value-add techniques that improve their processes and standards. Lastly, government should focus on access to Credit. From a recent government survey, about 85% of capital for SMEs is sourced from personal savings and family, with loans from financial institutions amounting to just around 5%. As regards MSME’s struggle with tax harmonization, government must support by offering tax rebates/holidays, and grant pioneer status, especially to Tech start-ups. This would further aid in addressing the ease of doing business for companies in Nigeria. Page International Financial Services Limited will continue to seek opportunities to work with stakeholders such as the Government, Regulators and other players in the industry to ensure growth in the Financial Services sector and especially for accessibility to credit by well-meaning Nigerians who have the capacity and willingness to repay such facilities.
Name of Company: Syracuse Digital
Q: Can you give us a brief introduction about yourself and company?
R: I am Sunkanmi Ola. I am the Founder and Chief Operating Officer of Syracuse Africa. Syracuse Africa is a digital creative Ad agency based out of Lagos Nigeria. We handle marketing strategy, management and execution for brands across Digital, PR, Product Development and Branding. Syracuse Africa was established in 2012 and has evolved gradually into an innovation powerhouse in this field, establishing some of the biggest & leading brands in Nigeria and across the African market, forging the path of entry for global brands into the West African market and driving the brand growth of local innovative businesses.
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Q: How is the Nigerian business environment impacting your SMEs?
R: The same challenges as have always been still exist – poor or lacking infrastructure in many cases, insufficient access to SME finance, weak or faulty policies to support and protect small and medium sized businesses … the list goes on. On one hand this chokes the lifeblood of young businesses but on the other hand it presents a challenge that drives the need to innovate, in order to survive. As a company, we have had to thrive and grow in spite of these challenges, but this hasn’t come without its sacrifices.
Q: What are the most critical problems SMEs face in doing business in Nigeria in relation to your industry sector?
R: Infrastructure, or the lack of it, stands out sorely. This affects some industries more than others, but it does cut across all sectors, including the service industry which we as Syracuse Africa play in. Epileptic power supply, high cost of good internet service among others drive up the cost of conducting business and SMEs suffer the most from it. Other problems such as lack of access to growth finance are just as bad too, because these things are critical to sustaining a healthy and encouraging business environment.
Q: Can there be any end to the constraint of financing for SMEs?
R: So far, there have been positive steps to address this problem in particular. Both from the sides of government policies pushing commercial banks to increase and meet their quotas for SME financing, as well as the increased volume of companies moving into the credit space to bridge the gap. These markers show that a future with sufficient SME financing is possible. There is however a long way to go.
Q: Do you think the existing policies and regulations are enough to ensure the proper functioning of the SMEs in Nigeria in relation to your industry sector?
R: At the moment, no. Not even close. Not just in the service industry but across the SME sector overall. A lot more initiative is needed in this regard especially from the part of policy makers and enforcers.
Q: If No, what policies and regulations do you propose should be implemented/ introduced?
R: Government should intensify intervention programs that will aid growth of MSMEs by making affordable financing options available. Additionally, more attention and support should be given to knowledge acquisition through access to requisite trainings and apprenticeship systems based on global standards. Local businesses now have to provide goods and services that compete with foreign products. With international exposure through robust trainings and apprenticeship models, these local businesses can learn value-add techniques that improve their processes and standards. Lastly, government should focus on access to Credit. From a recent government survey, about 85% of capital for SMEs is sourced from personal savings and family, with loans from financial institutions amounting to just around 5%. As regards MSME’s struggle with tax harmonization, government must support by offering tax rebates/holidays, and grant pioneer status, especially to Tech start-ups. This would further aid in addressing the ease of doing business for companies in Nigeria. Page International Financial Services Limited will continue to seek opportunities to work with stakeholders such as the Government, Regulators and other players in the industry to ensure growth in the Financial Services sector and especially for accessibility to credit by well-meaning Nigerians who have the capacity and willingness to repay such facilities.
