UTME: JAMB registers 1.6m candidates, arrest 15 for fraud

Godsgift Onyedinefu Feb 21, 2023

APC, PDP, 15 other parties kick off campaign ahead Rivers LG poll

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Naira shortage puts $220bn informal economy on life support

Amidst naira scarcity, CBN deliver cash to doorsteps in Kano

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Atiku cautions Tinubu against oil windfall misuse, reserve depletion

Atiku parleys with Rivers stakeholders in Abuja

Anthony Ailemen Feb 20, 2023

Atiku Abubakar, the Peoples Democratic Party (PDP) presidential candidate, on Sunday night, met with stakeholders from Rivers State and vowed...

Lai Mohammed: Nigeria’s own Joseph Goebbels

Nigeria is better than we met it in 2015 – Lai Mohammed

BusinessDay Feb 20, 2023

The Federal Government says Nigeria has made tremendous progress and is better than in 2015 when the opposition Peoples Democratic...

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

Edo: 1.9m voters to decide PDP, APC, LP fate in 2023 polls

Churchhill Okoro Feb 20, 2023

The Independent National Electoral Commission (INEC), Edo State office, on Friday, said a total of 1,996,088 Permanent Voters Card (PVC)...

Tinubu not overambitious, only out to reap after sowing - Wife

James Kwen Feb 20, 2023

Oluremi Tinubu, wife of Bola Ahmed Tinubu, the presidential candidate of the ruling All progressive congress (APC), said her husband...

Election: Nigerian Army assures Borno residents of adequate security

BusinessDay Feb 20, 2023

The Nigerian Army has reiterated its readiness to provide the required security in Borno during and after the February 25,...

Timing subverts naira redesign good intentions – NESG

Bunmi Bailey Feb 20, 2023

The Nigerian Economic Summit Group (NESG), a private policy advocacy group, says that the timing subverts the naira redesign policy’s...

Why Nigeria’s passport scarcity persists

We have 400 uncollected Nigerian passports – New York Consulate

BusinessDay Feb 20, 2023

The Consul General of Nigeria in New York, Amb. Lot Egopija, has said that 400 Nigerian passports remained uncollected at...

Detailed WAEC examination timetable for 2026 private candidates

WAEC withholds result of 7,871 candidates for malpractice

Charles Ogwo Feb 20, 2023

The West African Examinations Council (WAEC), has announced that the results of 7,871 out of the total number of 73,424...

Nigeria’s 17million housing deficit data is baseless — Fashola

Naira redesign: Fashola, Keyamo differ over Buhari’s action

Kelvin Okojie Feb 20, 2023

The political drama over the naira redesign policy took another dimension when two ministers of President Muhammadu Buhari’s cabinet and...

Banks, Schools in Edo shut as EndSARS protests persist

Residents protest closure of banks, declare no elections in Ogun

Razaq Ayinla Feb 20, 2023

Some residents of Sagamu, political headquarters of Remo section of Ogun State, comprising Sagamu local government, Remo North local government...

Nigeria Air: Ethiopian Air boss meets Buhari, seeks early disputes resolution

Anthony Ailemen Feb 20, 2023

President Muhammadu Buhari on Sunday in Addis Ababa met with Girma Wake, Ethiopian Airlines Board Chairman, who pleaded guilty with...

Commonwealth observer group calls for peaceful elections in Nigeria

Hope Moses-Ashike Feb 20, 2023

Commonwealth Observer Group of Nigeria has urged the country’s political parties, candidates and their supporters to play their part in...

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.

CIBN, bank CEOs say lenders to remain open

Hope Moses-Ashike Feb 20, 2023

The Chartered Institute of Bankers of Nigeria (CIBN) in collaboration with the body of banks’ chief executive officers has assured...

Why online fraud is on the rise globally – Aguele, QoreID boss

Cybercrime seen as drawback to cashless economy

Eniola Olatunji Feb 20, 2023

The move to a cashless economy comes with its downsides, one of which is a higher risk of cybercrime, says,...

Buhari’s death abroad amplifies call for world class hospital in Nigeria

Stop the jokes about interim govt, election will hold – Presidency

Anthony Ailemen Feb 20, 2023

The presidency on Friday said President Muhammadu Buhari was not working on interim government, adding that elections will hold as...

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UTME: JAMB registers 1.6m candidates, arrest 15 for fraud

Labour Party leads with most PU agents, lags behind in key states

Five things to know to start your Tuesday

Schools need sports to groom students with quality social, emotional skills – Babatunde-Yamah

Amidst naira scarcity, CBN deliver cash to doorsteps in Kano

News

Atiku parleys with Rivers stakeholders in Abuja

Nigeria is better than we met it in 2015 – Lai Mohammed

Edo: 1.9m voters to decide PDP, APC, LP fate in 2023 polls

Tinubu not overambitious, only out to reap after sowing - Wife

Election: Nigerian Army assures Borno residents of adequate security

Timing subverts naira redesign good intentions – NESG

We have 400 uncollected Nigerian passports – New York Consulate

WAEC withholds result of 7,871 candidates for malpractice

Naira redesign: Fashola, Keyamo differ over Buhari’s action

Residents protest closure of banks, declare no elections in Ogun

Nigeria Air: Ethiopian Air boss meets Buhari, seeks early disputes resolution

Commonwealth observer group calls for peaceful elections in Nigeria

CIBN, bank CEOs say lenders to remain open

Cybercrime seen as drawback to cashless economy

Stop the jokes about interim govt, election will hold – Presidency

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