November 30, 2017

SMEs fault banks’ claims on financing

Deadline on NIN/account linkage: Most banks yet to implement directive

Banking hall

By Franklin Alli

Operator in the Small and Medium Enterprises (SMEs) sector has faulted claims by some local banks to have hugely financed many businesses in the sector.

Some of the operators voiced out their frustrations during the just ended Nigeria SME CONNECT 2017, organised by Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) in collaboration with Footprint  to  Africa.


In an interview with Vanguard at the event, Dr.Teju Bolujoko, Managing Director/CEO,   Ruchim Investment & Manufacturing Ltd, manufacturers of Master brands of herbal tea,   said: “ Banks have a lot of challenges. They see small-scale businesses as very risky; if any bank tells you that ‘we are great supporters of small businesses’, they are lying; they are telling lies. They have a huge amount of money in reserve but they are never using it for the small industries.

“You cannot be talking about funding small business at an exchange rate of 19 to 30 percent. Every nation invests in  small businesses. In China, 80 percent of businesses that are employing people are     small businesses; we have to grow them, we have to invest in them, support them and with the desire of the government that non-oil exports grow.”

Corroborating to this, another operator who doesn’t want his name in print, lamented that all his efforts to borrow N3 to N5 million from a development finance institution failed.

Chris Oshiafi, Managing Director/CEO,  PanAfrican  Capital Ltd, however, encouraged the operators to look beyond seeking banks funding to grow their operations.

He urged SMEs to embrace ‘Receivable financing,’ stressing:   “Hotels and all the major corporations’ worldwide deals with SMEs. If you improve the quality of your products you can sell to them and make millions. A Nigerian lady that invested in paw-paw farming is selling to nine hotels in Abuja, and she is smiling at her bank.”

Osita Oparaugo, Managing Director, Footprint to Africa, said that another driver of success for successful SMEs is collaboration.

According to him, there are lots of things SMEs operators can achieve through collaboration rather than continuously crying to the government to provide everything.

“SMEs need collaboration to grow; you shouldn’t rely on the government to provide everything 100 percent, the government can’t do everything; they will do their best, and as SMEs, no finance house will give you money without your business having a structure.

“The Nigeria SME Connect seeks to connect small and medium scale business owners with viable partners to enable them further their business goals and expand their operations and reach beyond the shores of Nigeria,” he said.