Divisional Head, SME & Agency Banking of Heritage Bank Plc, Obioma Emenike in this interview notes that while the dwindling availability of foreign exchange has enhanced the prospects of SMEs, addressing the challenges of the subsector however requires holistic approach by stakeholders.

By Babajide Komolafe

In recent times, your bank has been aggressively involved with SMEs. What would you consider the greatest prospect or opportunities for financing SMEs in the country?

The drive for Made in Nigerian products occasioned by dwindling foreign exchange availability has presented veritable business opportunities for SMEs across key economic sectors such as the manufacturing, food and beverages (agriculture value chain activities), and fashion/arts and crafts (textile, and facial beautification). SMEs enjoy the leverage of increased demand for their goods and services with the added prospects for export opportunities. Heritage Bank recognizes these opportunities and is adequate positioned to tap into these huge business opportunities.

•Obioma Emenike

And what would you consider as the biggest challenge for banks in terms of financing SMEs in the country?

Some amongst the challenges considered as critical are access to market; access to affordable and available inputs and materials for production and operations; and access to relevant technical, managerial/entrepreneurial skills set, weak linkages among the value-chain actors, poor market coordination and lack of fidelity to contract agreements.

In your view, do you believe SMEs recognise and are addressing this challenge?

With increased accessibility to information on SMEs and greater business focus by the various stakeholders, it is fair to say that most SMEs in the country now have an understanding of these pressing challenges. However, resolution of these challenges requires a more holistic approach which they may not be able to address alone. These challenges, we believe need to be addressed by the entire stakeholders of SME finance. At Heritage Bank, we are mindful of this need for an all-inclusive approach and we have been in partnership with the major stakeholders at various fora, addressing the challenges faces by SMEs.

How is your bank helping SMEs to address these challenges?

For access to market challenge, Heritage Bank has built initiatives around promoting access to market for SMEs such as the Heritage SME Business Fair, and our novel Heritage SME Sunday Market. These events enable our SME customers to showcase and sell their products and services to potential customers/consumers thereby increasing their visibility and market reach.

Likewise, in line with our value-chain optimization, we leverage on our business structure as a bank to connect our SMEs to large corporates from whom they could source inputs at a cheaper and more affordable prices and link them to our retail clients for purchase of their goods and services. To enhance the skill-set of our teaming SMEs, Heritage bank currently runs a training and hand-holding scheme called SME Clinic. This is a visionary business solution aimed at providing smart, innovative and cost effective business support for our entrepreneurs that will also assist them to generate substantial value in their businesses.

Despite increased attention and support for SMEs by banks, CBN, most SMEs out there still have this perception that the banking industry is not favourably disposed to SMEs. What can be done to correct this impression?

Interestingly, this impression is centred on SMEs’ access to finance. Indeed the financing of SME carries unusual risks which are evolving daily as our economy passes through a recovery stage from recession. Banks and CBN need to co-create tested sustainable business models for specific economic sectors in order for the financing to be effective and sustainable. One of such innovative ideas Heritage Bank has partnered successfully with the CBN is the N3billion Youth Innovative Entrepreneurship Program (YIEDP).