Tag: SME

  • AfDB approves $20m credit  to support real estate SMEs

    AfDB approves $20m credit to support real estate SMEs

    The Board of Directors of the African Development Bank (AfDB) last Wednesday, approved $20 million Trade Finance Line of Credit for the Company for Habitat and Housing in Africa/Shelter Afrique (SHAF) to boost the availability of Trade Finance (TF) instruments to small and medium enterprises (SMEs) involved in real estate and construction related activities in Africa in order to address the critical shortage of building materials while creating jobs and income in the region.

    Economic growth, exponential urbanisation and a growing middle class are hampering the provision of adequate housing in Africa. The construction industry is growing at 20 per cent per annum, but this cannot sufficiently address the rising demand for housing partly due to a wide financing gap for construction and building materials. The public and private sectors have so far been unable to deliver sufficient resources to meet this expanding working capital requirement. Where funding is available, pricing remains prohibitive.

    SHAF is the only pan-African organisation devoted to financing the development of proper housing and human settlements in Africa. Created in 1982 and headquartered in Nairobi, Kenya, this pan-African housing finance and development institution addresses acute shortage of housing by providing financial and technical resources for sustainable housing and urban development. SHAF’s current shareholding comprises 44 African countries, AfDB and Africa Reinsurance Corporation (Africa Re). It is worth noticing that AfDB played a key role in the establishment of SHAF as the vehicle for supporting sustainable housing and urban development in Africa.

    The AfDB’s four-year facility will allow SHAF to expand its Trade Finance Program, launched in June 2011, under a product diversification strategy to address the acute financing shortage facing real estate developers in Africa. SHAF will also partner with other financial institutions offering TF services to SMEs in real estate construction and building industry and those involved in trading/leasing of building materials and equipment. Through this contribution, AfDB would leverage SHAF’s market knowledge and networks across the continent and hence assist to alleviate some of the structural financing inefficiencies encumbering Africa’s real estate growth.

    This facility, boosting the availability of affordable housing in Africa through financial institutions and SMEs involvement, will thereby enhance inclusive growth and private sector development as espoused in the AfDB Long Term Strategy for 2013-2022. Trade facilitation is one of the three strategic objectives of the Bank’s Regional Integration Strategy 2009-2012 as the AfDB seeks to mainstream and institutionalize its engagement in Trade Finance development in Africa.

  • MY SME STORY: ‘You need perseverance to succeed as an SME’

    MY SME STORY: ‘You need perseverance to succeed as an SME’

    Mr. Oseni Abayomi, a graduate of Banking and Finance from University of Ado-Ekiti, (UNAD), Ekiti State, sits atop Xpress Max Dry Cleaning Services as Managing Director/Chief Executive, which he set up in 2011. In this interview with Tolulope Ogidan, he shares his experience on running a fledging business

    That is your antecedence in business?

    I was working as a branch manager with Assluence Consulting, a one-man business. But then I’m the kind of person that loves looking good and then pressing of clothes is my hobbies. When I was no longer finding fulfillment in what I was doing, I resigned. That was 2011. When I resigned, the money I was able to gather, that was how I was able to sketch up my own personal business. I started from my parent’s place along Iyana-Iba axis of Lagos, that’s supposed to be the head office. I brought a washing machine, and started meeting one or two contacts, people that I know. I started the washing myself, I wash, put in the machine, I iron, I distribute, send text, later I started sending bulk sms, when I realised that I could not deliver, because I hate disappointing clients, I started bringing one or two people in like of staff.

    How much capital did you start with?

    I started with nothing less than N50, 000. But some start with 100, 200, it depends on what you have.

    What has your experience been running the business?

    It’s been wonderful. It’s a very good business and a very lucrative business, if somebody will actually want to go into it, it’s a business that is very profitable, but the only challenges is manpower, and the challenges is man power, because typical Nigerian guys are not ready to do that kind of job because, it’s not an easy task, for you to iron 20-30 pieces of clothes, so why doing that, you know it requires manpower, by so doing they usually back off, they usually back off from such act. So we have challenges with manpower, so we have no choice than to go to Cotonu to get some people to work for us.

    How many employees do you have now?

    Presently, I have about five staff.

    What are the challenges you faced when you started?

    The challenges I faced was just that when people place orders on phone, because I do it via mobile, they send me text, please come and pick my clothes, at that point am ironing, am ironing I need to pick clothes from two, three places, those were the challenges I was having, and then when I need to get some clothes, wash it at the same time, and iron it, at times I do night, because I was the only one, so I had a lot of challenges when it comes to picking and delivering.

    What’s the peculiar problem that you faced running the business?

    The most peculiar problem is when you disappoint client, I need to wear my clothe to church tomorrow and such person do not get it, that’s one, two if somebody gives you a white cloth and the person happens to discover that the white happens to be of cream, it’s another challenges, because we use chemical and all those things, are things you need to be familiar with, and you should know their names, because there are some kind of chemicals, that should not be applied on black, and there are some that should be applied, so those things are key things that somebody that ones to go into dry cleaning business ought to have study, if not there are some tools that are very expensive, if you mistakenly collide it with the ones that bring out stains, it can really destroy the cloths of such a client, and he/ she will not take it likely with you. Some client will tell you that go and buy me another one, or some will say I not going to give you clothe again. those are the things you need to do, if you want to wash you separate them, study it, the ones you need to apply chemicals or not.

    How did you overcome the teething problem of the business?

    You know when you make mistake once, and then I as a person am an intelligent person, and I don’t joke with my job, so I won’t allow anybody to rubbish me, I was able to manage those challenges because I don’t want my name to be rubbished, before I put any cloths in to the machine, I use to do the real laundering, the real laundering is when you use your hand, so I take my time to know if such a clothe will be able to absorb chemical or not, so that was how I was able to overcome it, but there is no how you must make mistake, because when you make mistake you will be able to correct such mistake next time.

    So how much is required to set up a business like yours?

    It depends on the kind of the one you want to go into. It depends, you can set up the business with just N50, 000 when you have you house, all you just have to do is to get a washing machine and that’s all, and you get a very sound steaming iron, because there are some that cannot iron all kind of fabric, and there are some that when you put it on a particular kind of fabric for the next ten hours, it will not get burnt, it automatically regulate, and there are some that are expensive as N15,000, there are some of twenty thousand, and there are some of N7,000, it depends on the range, with N50,000 you can set up the business.

    Do you have any plans of expanding the business?

    Obviously, I have the plans of expanding the business, because it’s a business that does not really attract much space, and it’s very profitable. Even outside Nigeria, yes, because people hardly have time in Nigeria as a whole, you go to work early in the morning, you come back late, your Saturdays you go to party, Sundays you go to church, they hardly have time to do laundry, and most of their expensive cloths they prefer to take it to dry cleaner, so that such materials can last longer.

  • Heritage Bank identifies hurdles to SMEs growth

    Heritage Bank identifies hurdles to SMEs growth

    The Chief Executive Officer, Heritage Bank Plc, Ifie Sekibo, has advised Small and Medium Scale Enterprises to focus more on restructuring and innovation in order to access the unfolding opportunities for growth and development in the economic landscape.

    Sekibo noted that SMEs were a vital national economic growth engine, contributing to economic indicators like employment generation and Gross Domestic Product with about 70 per cent of the rural population being active in the formal and informal SME sectors.

    He, however, pointed out that growth possibilities were being hampered seriously, as a low number of start-ups that apply for medium-longer-term financing were actually succeeding.

    He attributed the main challenge facing SME promoters in the country to limited access to appropriate capacity building opportunities and education which, in turn, lead to other growth-limiting impediments such as inadequate financial record keeping, poor managerial skills, lack of access to international markets, inability to provide collateral and poor access to infrastructure.

    According to the CEO, for the country to achieve the laudable dream of the Vision 2020, the national technical working group on SMEs and all stakeholders in the SME sector must join hands to create and sustain an active SME sector through the establishment of a solid framework supported by a clearly articulated government policy.

    He said, “SMEs enhance competition and entrepreneurship, and their proper development has a positive impact on innovation and productivity growth. Developing the SME sector, therefore, requires a concerted effort from all stakeholders.”

     

  • SME Funds promises to boost renewable technologies

    SME Funds promises to boost renewable technologies

    SME Funds promises to boost renewable technologies. SME Funds, a group committed to alternative energy developmen,t has concluded plans to deliver clean cooking and renewable energy technologies to over 10 million households in Nigeria and other parts of West Africa.

    This is targeted at solving problems that many households encounter in meeting their domestic cooking needs in the region.

    The SMEFunds Cofounder and CEO, Mr. Femi Oye, who confirmed the development, stated, “People are hungry for good alternatives to kerosene and other unsafe, dirty cooking fuels.”

    He said, “We started with the simple belief that cooking shouldn’t kill. Why should our women cook with tears?”

    Oye also said, “Africa – SMEFunds ‘Green Energy & Biofuels’ (Nigeria) has been named the best clean energy investment opportunity in West Africa and overall Winner at the West Africa Forum for Clean Energy Financing (WAFCEF) Business Plan competition in Accra.

    He said the competition assessed business plans from all clean energy sectors across West Africa in two elimination rounds.

    The final round brought the top 10 companies among the 72 applications received to Accra where they were judged by representatives from major international organizations such as Leo Blyth (IFC, Lighting Africa Initiative), Musa Salah (EcoBank), Godfrey Mwindaare (Acumen Fund West Africa), Professor Joseph Adelegan (EBID), and Sander Smits van Oyen (SOVEC).

    Green Energy & Biofuels stood out due to the established track record of SMEFunds, innovative technology and the ability to scale quickly.

    The $28million Investment in the first round will go towards scaling up their renewable ethanol cooking gel production and clean cookstove manufacturing.

    Already, over 1 million liters of cooking gel has been produced locally using 2G Cellulosic Bio-Ethanol technology from wastes such as water-hyacinth and saw-dust from Lagos saw mills.

    SMEFunds has already recruited over 15,000 entrepreneurs through its Carbon Credit Network and helped them start green businesses that sell the cooking gel and stoves across Nigeria and West Africa.

    More youth and women stand ready to bring safer, stable green energy to their communities once the scale-up is reached.

    The Climate Technology Initiative Private Financing Advisory Network (CTI PFAN), the ECOWAS Regional Centre for Renewable Energy and Energy Efficiency (ECREEE), and the Regional Clean Energy Investment Initiative (RCEII) of the U.S. Agency for International Development (USAID) and SEFA supported the competition.

    The business plan was assessed thoroughly after benefitting from a six month program which provided development and structuring, the preparation of bankable business plans and investor pitches from professional advisors, clean energy investors and commercial banks.

     

  • N200bn SME fund: NDIC urges states, councils to float microfinance firms

    N200bn SME fund: NDIC urges states, councils to float microfinance firms

    The Managing Director and Chief Executive of the Nigeria Deposit Insurance Corporation (NDIC), Umaru Ibrahim has urged states and local governments in the country to float microfinance institutions in order to access the N200 billion Medium, Small and Micro Enterprises Development Fund (MSMEDF).

    Speaking at the closing ceremony of the 2013 workshop for financial correspondents in Uyo, Akwa Ibom State, Ibrahim explained that the fund for MSMEDF would not be effective in states with large rural areas and few microfinance banks unless there are banks to support the existing ones.

    “We continue to call on the local governments, the state governments to float and nurture sustainable MFBs in their areas so as to help the poor in their areas to have access to savings and to credit without which our strive for financial inclusion and poverty eradication will not be realized. Those states that obviously don’t have enough MFBs cannot easily access that N220 billion.

    “For instance, in Jigawa even as at today, there are less than five functional MFBs even though there is a brand new airport there. The Central Bank of Nigeria (CBN) has realized that it is important for state and local governments to be given the opportunity to float and nurture MFBs.

    “This is a new policy that has been agreed upon by the CBN and it is in the realization that MFBs cannot be left in the hands of Deposit Money Banks (DMBs) because the creation and sustenance of MFBs is a very serious developmental issue and the UNDP and some other developmental organizations have amply demonstrated that,” he said.

    He further said there is a direct link between the depositors and financial inclusion.

    “As you know we charge far less premium for MFBs. They pay far less and as we speak for the last couple of years, a lot of them have not been able to pay the premium they are supposed to and yet we have not closed them down for that and have not ceased to insure them.

    “This is because we feel they have to be encouraged and as a matter fact, the 103 MFBs that were liquidated two to three years ago a lot of them did not have enough money for us to pay their depositors and we had to resort into topping up from the premium we collected from the other banks”, he said.

     

  • How to access SME funds

    How to access SME funds

    Bukola Afolabi in this report shares useful tips on how small and medium scale entrepreneurs can access some of the intervention funds earmarked for the sector by the Federal Government through some of the quasi-governmental agencies like the Bank of Industry (BoI) and others

    According to a recent survey conducted by the National Bureau of Statistics and SMEDAN, the SME sector currently represents 97 per cent of the enterprises in Nigeria and employs over 32million Nigerians.
    But, it is, however, instructive to note that one of the major challenges that have limited the access of small and medium scale enterprises to credit facilities is their inability to present bankable proposals to financial institutions.
    Echoing similar sentiments, Ms. Evelyn Oputu, Managing Director of Bank of Industry (BoI), said the difficulties most SMEs face in their quest to secure funding for their businesses, is as a result of their inability to supply the right information required by banks to process their loans application.
    Having recognised this, the BoI has continued to organise series of capacity building programmes to empower owners of small businesses across the country.
    Thankfully, BoI under its paradigm shift launched in 2006 has continued to dedicate 85% of its resources to funding of the SME sector.
    In order to address the problem of lack of access to finance for the development of the sector, the federal government, through the BoI, has developed a counterpart funding scheme and currently has a partnership with 17 states, with more in the pipeline for next year.
    This scheme has generated a funding pool of approximately N9billion for MSME development.
    This new scheme being spearheaded by the Federal Ministry of Industry, Trade and Investment (MITI) is aimed at harnessing the vast opportunities in the MSME sector to drive inclusive economic growth through skills acquisition, entrepreneurship training, business financing, employment generation as well as wealth creation. And in order to harmonise all SME development activities across the country and achieve maximum impact, the Federal Ministry of Industry, Trade and Investment is promoting the establishment of SME council in all the 36 states and the Federal Capital Territory, Abuja.
    The SME council are structured to comprise relevant state government official, those of the organised private sector and representatives of SME promotion, development and facilitation agencies.
    ABC of accessing BoI funds
    BoI fund items like manufacturing, agricultural and so on. To access the Bank’s facilities, prospective applicants are required to take one of many steps.
    Among other things, an applicant is expected to submit a proposal by writing a formal application letter, completion of BoI’s questionnaire.
    Besides, applicant must produce a photocopy of Certificate of Incorporation, Certified True Copy of Memorandum and Articles of Association, form CAC 2.5(CO2) and forum CAC 2.3(CO7) of the company.
    Prospective applicants are equally required to provide the most recently audited accounts in the case of existing businesses in the last three years and a report of feasibility study, land and building documents with an unexpired tenure of 25 years minimum, statutory Certificate of Occupancy original copy for sighting, approved building plan, bill of quantities or contractors estimate\valuation report on building as applicable as well as a satisfactory tenancy agreement long enough to cover the tenure of BOI’s facility, in respect of suitable rented property.
    Other requirements include providing a proforma invoice for items of machinery and equipment from the source indicated in the feasibility report; enumerate price and source of raw materials, present a tax clearance certificate of the company along with names of at least two directors for the last three years, with eight recent passport photographs, international passport or driver’s license of each and that of the company secretary.
    In an interview with The Nation, a highly placed source at the BoI, who would not be named, said, “You can simply walk into any of our offices in Lagos, Abuja and the six geo-political zones across the country to access our loans. You don’t have to know anybody at BoI to enjoy our services.”
    Besides, BoI, there is also the Micro, Small and Medium Enterprises Development Fund (MSMEDF) which has been earmarked a proposed seed fund of N220billion, with a minimum of 60% (N132billion) of the Fund committed to providing financial services to women in order to address their peculiar financial exclusion challenges.
    Guidelines for accessing MSMEDF
    This guideline specifically sets out the modalities for operating the N132billion women component of the MSMEDF.
    The Fund’s two main objectives namely: social/developmental objectives/grants.
    10 % of the MSMEDF has been earmarked for administrative objectives in the following categories: Managing Agent’s Operational Activities of three percent (N3.96b) and Interest Drawback Programme of two percent (N2.64b).
    Details of the application of the grants
    A component that includes capacity building of staff of microfinance institutions (MFBs, MFIs and similar institutions) and their apex bodies on women-based lending has been built into the fund.
    Besides, microenterprises which have a mandate to manage 80% of the commercial component of the Fund have N95.04 billion while SMEs are expected to manage the remaining 20% of N23.76billion.
    Activities for which the PFIs can seek for facilities from the Fund shall include those for agricultural value chain activities, trade, cottage industries, artisans, services including: hotels, schools, restaurants, laundry etc and any other income generating projects as may be prescribed by the Managing Agent.
    The Fund shall be managed by a Special Purpose Vehicle (SPV) under the terms and conditions defined in the general guidelines for the MSMEDF. In addition the Department of the Fund that shall administer the Women component of the MSMEDF shall be headed by a woman.
    Requirements for Microfinance Banks/Finance Companies
    For a microfinance bank/finance company to be eligible for support from the Fund, it is expected to satisfy the following conditions as obtained from its latest CBN examination report:
    • Compliance with regulatory capital
    • Compliance with prevailing prudential ratios: liquidity 20%; capital adequacy ratio 10%; adjusted capital to net credit ratio; micro credit to other loans ratio; and 80:20.
    • Average deposit growth rate of 20 % per annum
    • Favourable profit trend for three years.
    • Risk management framework acceptable to the regulators
    • Corporate governance culture acceptable to the regulators and as indicated by number of non-performing insider-related facilities; degree of separation of ownership from control/management; adherence to sound ethical values.

  • MY SME STORY: ‘I’ve never enjoyed support from banks’

    MY SME STORY: ‘I’ve never enjoyed support from banks’

    Funsho Okunnwo, Chief Executive Officer, Royal Priesthood Laboratory, is a small and medium scale entrepreneur who has conquered his terrain. In this interview with Bukola Afolabi, the 56 years old pharmacist and graduate of the University of Lagos shares his experience in running an enterprise vis-à-vis challenges and prospects

    Can you tell us exactly what your business is all about?

    I am a pharmacist and I run a pharmaceutical company Royal Safety Laboratory to the class of product and drugs which we call antiseptic disinfectant. These are products that are used to eliminate or kill germs, everywhere like industries, hospital. Some of them are used in theater before the surgery why some are used in the wards, some for patient.

    How much capital did you use to set up shop?

    In 1992 I started with a capital of N100, 000 and I have been turning the money over. Like every small business at that time it was a tough beginning but I got inspiration from the people who encouraged me to start.

    How many employees do you have now?

    Currently, I have about 18 staff.

    Where did you start your business from?

    I started from Ogba Lagos. I rented a three bedroom bungalow in Oke-Ira, Ogba, and that was where I started with just one car, the number continued to increase over the years, but later we had to relocate to Ikorodu due to accommodation problem.

    How much is the business worth now?

    Well I can’t say precisely but I know that we are not less than N2million, if not more.

    How easy was it for you to get the capital then?

    The capital that I started with was gotten through savings from my earning, because I used to work with some companies before I resigned to start Royal Priesthood Laboratory. While I was in the service there was usually one thing or the other that I did to survive. For example, where I have my current office was used for my piggery business. Then I put things together and I was able to raise the starting capital.

    How is your relationship with banks?

    My sincere opinion is that Nigerian banks are not in any way supportive. They have not in any way supported me or Royal Priesthood, I doubt if they are supporting SME’s. For example, I can recall two situations to buttress my point. In the first, I was asking to supply some goods in Lagos sometimes ago and I needed about N600, 000 in the year 2000 but I couldn’t raise the money. I approached the bank but I didn’t have the collateral they were asking for and eventually they didn’t give me. I had to go borrowing from friends and others. Then there was another occasion that I needed to import raw materials and it was going to cost about N500, 000 and I had about N350, 000. So I asked the banks to just give me about N150, 000 to make up the difference, but they did not respond, eventually I had to look for another alternative. So to me even up till today I don’t believe they mean what they say. Interestingly, they are now running after us to come and open account and borrow money; I told them that they want what the Yoruba’s call Ako eyin adiye je ti o mo pe idi ro adiye. (One who eats up a fowl’s eggs voraciously but doesn’t know what it takes to lay eggs.)

    Can you tell us your challenges during these periods?

    On the challenges, there were many. From the start I had accommodation problem because shortly after we started, in less than two years the landlord ejected us from where we started from. We then needed a place that would be acceptable to the regulatory agent, the NAFDAC and Pharmaceutical Council of Nigeria. This must be a self-contained apartment that we will be the only one in the compound, and that sort of accommodation was not so easy to get for rent.

    So, for about a period of one and half years I was looking for another place after we were ejected from the old place because my nature is not to make trouble with anyone. When the landlord ejected us, we just left the place.

    I did not question or query him before we got another accommodation in Ikorodu another rented apartment but by the grace of God we are now operating the business in our own accommodation now. Part of my initial challenge therefore was capital and this would always be there. There was also the challenge of acceptability and when we started many of the hospitals then were skeptical of the quality of the products. Luckily for us, the quality was good and the glory of God today many of them are no longer skeptical about us. Another challenge we were faced with was meeting the requirement of the regulatory body. Many times they came complaining that it was not up to standard in terms of this and that.

    I will say to a large extent that it is a positive challenge and it helped us to continue improving standard. Today, even if they are coming not that they won’t have one thing or the other to say, and we are confident that for any fair or reasonable person everything is in place.

    If you want to advice somebody who wants to start a business, what are the three most important things?

    The first thing I will tell the person is that Leoshe should not look at the capital irrespective of how high the capital may be. Don’t look at the capital, start with whatever you have and then start improving on it. This way you will cut some expenses and save more. Many people actually spend on those things that are not so important and when you have a big project before you, then you would be forced to save towards it. The second thing I will say is the place of honesty in your business because it goes a long way to create credibility for your brand. Today, it’s unfortunate that a lot of people are not honest and they want to cut corners and compromise, especially in terms of the products standards. It is very important to be very honest with your customers, because with time they will get to know you for that and this in itself will be a selling point for you.

    What are the most important mistakes they must avoid?

    I would say that one should never think that without a big capital they cannot start. Interestingly, that is the mistake that many people make and most times they would say I don’t have money or I cannot start. It is sad to note that a lot of Nigerians are not honest when it comes to business; I think that’s a mistake on our part. In addition to all this, it is important to feel free to talk to people about your needs ,there are doors that can be opened to you, just because you opened up to someone.

    What are the prospects SMEs in Nigeria with banks and government policy?

    Well, the government policy I will say it is just in the papers. Government in my mind are not making enough effort to implement the policy and then the banks are ready to give loans to those who will only give them some quick turnover. These would be people who will just go and collect contract papers and terms of collateral are not within the reach of many SME’s. Usually what you find are situations where SMEs have to provide their own capital, electricity, water, to mention just a few.

    Recently the federal government said they have spent N7billion on SME’s through Bank of Industry including N9billion for SME’s, how directly or indirectly are SME’s really benefiting from it?

    I believe that some of the SME’s are accessing the funds. But on my own part the times I needed such money has passed. I have resorted to just doing things my own little way, I don’t think I need them so much because the type of fund they are saying they want to give. I don’t believe that those kind of capital are beyond my reach , so I can generate it within, why do I go out to get it? I am not saying that we are there yet but I will rather want a situation we grow gradually not fast like some people do because that its own problem.

  • Dana’s Usidamen  moves on

    Dana’s Usidamen moves on

    YOUNG and dynamic Corporate Communications Head at Dana Group, Tony Usidamen, is on the move. For over five years, his smiling face and alluring voice have been synonymous with the Dana, and his expertise as a communications practitioner is evidenced by the remarkable growth and success of key brands, KIA and Dana Air, under his care.

    Usidamen, we gathered, is moving on to new challenges, though we cannot ascertain his next port of call. He began his marketing communications career in 2006 as a consultant with Sesema PR Limited, an integrated marketing communications company, where he worked on major brands like Ecobank Plc, Afrinvest West Africa, Total Nigeria, Ericsson Nigeria, SAS Nigeria (Business analytics software and service provider), Resourcery (IT solutions company) and AMSCO (SME Specialists).

    Since then, Usidamen has been gaining increasing recognition as one of Africa’s most promising brand communications specialists. In 2011, he was a nominee for Young Professional of the Year (Corporate) at The Future Awards Nigeria and, in the same year, he was named Africa’s Young Brand Manager of the Year at the African Brand Leadership Awards.

  • Aganga, Fashola others for FirstBank SME confab

    In its quest to sustain development of small and medium scale enterprises nationwide, FirstBank has initiated an annual conference that will highlight challenges and opportunities for small businesses.

    The maiden edition holds on Tuesday at the Oriental Hotel, Victoria Island, with the theme: ‘SMEs at the heart of National Development: Creativity, Capacity and Capital.’

    Among those expected at the conference is Lagos State Governor, Babatunde Fashola as the host; Minister of Trade, Mr. Segun Aganga as Guest of Honour, while CEO, SOKOA Chair Centre, Mrs. Ibukun Awosika and CEO, Konga.com, Mr. Sim Shagaya ‘will serve as keynote speakers respectively.

    Awosika’ an award winning entrepreneur and the founder and CEO of Chair Centre Group, has extensive experience in manufacturing and retail services that will drive conversations around capacity development in this sector and the opportunities available to entrepreneurs across the entire retail value chain.

    Shagaya, is founder of Konga.com and DealDey.com, and has over 11 years of management and entrepreneurial experience.

    Justifying the need for the conference, FirstBank’s Executive Director, Retail Banking South, Mr. Gbenga Shobo, said the critical role of SMEs as the engine of growth in the economy, providing employment to thousands of people and contributing significantly to the gross domestic product (GDP) makes the conference a timely platform for repositioning the nation’s SMEs for sustained growth.

    According to Shobo, the conference will have two panel sessions that will address access to capital, leveraging creativity and deepening capacities, among others. “Creativity is at the heart of entrepreneurship and all SMEs require some measure of this to birth their companies and continue to evolve and grow their businesses. Growth is not possible without building capacity in each sector by the acquisition of necessary skills and human resources to drive the business. Expansion can only be funded by acquiring the capital to invest in the business and take it to the next level of operation,” she said.

    Participants, expected from across the nation, are expected to pre-register on the Bank’s dedicated microsite for the conference at www.firstbanknigeria.com/smeconnect. The site, among others, will provide links to non-financial services such as toolkits and templates serve as a channel to obtain feedback from customers and resolve complaints and communicate products and services targeted at SMEs.

  • Are donor agencies doing enough to develop SMEs?

    Are donor agencies doing enough to develop SMEs?

    Bukola Afolabi in this report takes a critical look at the role of international development agencies in the development of small and medium scale enterprises.

    International development agencies such as the International Finance Corporation (IFC), a member of the World Bank Group, Department for International Development (DFID), African Development Banks, to mention just a few are favourably disposed towards the development of small and medium scale enterprises, especially in emerging economies like Nigeria.

    But whether SME operators in the country are aware of their existence, analysts, contend, is a different ballgame.
    However, what is also true is that SME operators have identified the lack of access to finance as a key constraint for the growth of their businesses.
    Investigation by The Nation however revealed that IFC has been partnering with Nigerian commercial banks to boost the provision of funding to SMEs in the country.
    The IFC has been exploiting its strong network of relationships with African banks through its Africa Micro, Small, and Medium Enterprise (AMSME) Finance Programme to help SMEs across the African continent.
    Currently, the AMSME programme operates in 16 countries across Africa, with 21 banks that have provided over $1 billion in outstanding loans to SME clients.
    The corporation also works with the DFID to expand the programme to Nigerian banks that have incorporated non-financial services to SMEs.To acquaint the banks with its plan for the SMEs, the corporation held a half-day workshop recently where it brought the banks together to share experiences in providing non-financial services to SMEs.
    According to the IFC’s Country Manager for Nigeria, Solomon Adegbie-Quaynor, “Non-financial services such as management and advisory support help SMEs acquire the skills they need to grow.”
    He further added that IFC recognises that local banks could be key conduits to SMEs’ growth in developing countries but however lamented that the bank-SME connection was not as widespread as it could be.”
    There about 445 million micro, small, medium enterprises in the developing world of which 70% do not use the services of financial institutions, according to the Central Bank.
    Curiously, the CBN observed with dismay that the sector creates 70% of employment, but contribute only 1% to GDP in the country, unlike in high-income countries, where SMEs contribute 49% on average to GDP.
    For the Minister of Trade and Investment, Mr. Olusegun Aganga, the activities of international development partners in the Nigerian economy should be demand-driven and tailored to the nation’s specific needs.
    Aganga said Nigeria and its development partners must agree on the country’s priority areas for productive channelling of resources.
    “We have realised that there has been a sort of communication gap between us and the international development partners. It doesn’t seem to me as if they fully understand what our plans, strategies and areas of priorities are. For me, it is critical that if they are here to assist, it should be demand-driven. It should not be driven by what they want to do in the country but what we need in the country.”
    “The second thing that I have noticed is that international development agencies are in the same area doing different pilot programmes across the country. That is not good enough for a country as big as Nigeria, with a population of 167 million people. If we channel our efforts and resources together, and support SMEs, for instance, they will be the drivers of economic growth; job creation and poverty alleviation.”
    A lot of the developed countries base their economic development, growth and job creation strategy on SMEs and it is pertinent for Nigeria to make use of this strategy.
    “That is the big area we want to focus on, in collaboration with the international development agencies. We have finalised plans to set up a special task force to fast track the growth and development of Small and Medium Enterprises across the country, noting that given the strategic role of SMEs in the ministry’s industrial revolution plan in terms of job creation and wealth generation, there was a need to harmonise the efforts and activities of all stakeholders in the SME sector, including the IDAs, to achieve optimal results.”
    He added that “Globally, Small and Medium Enterprises are the drivers of economic growth and job creation. For us in the Ministry of Trade and Investment, this is where we have the opportunity to make the biggest change considering the current unemployment situation in our country. We have just completed our database for SMEs, which showed that there are 17.6million SMEs in the country employing about 33 million people and contributing about 45 per cent to the country’s Gross Domestic Product.”
    However, most of the SMEs, about 65 per cent of them, are in the rural areas. “Therefore, to reach the rural areas, we need to have a robust strategy to make sure that they are included in our financial inclusion strategy and that we work with them so that they can start new businesses. Where they already have existing businesses, we want to work with them so that they can create more jobs by employing more people. We strongly believe that this is one of the areas we can positively impact on the lives of our people in line with President Goodluck Jonathan’s Transformation Agenda,” he said, explaining that in order to achieve this, the ministry was working on an SME strategy, including specific programmes within the strategy that would make a very big difference.
    “As part of this, we want to set up a task force that will involve SME specialists from development partners such as the DFID, USAID, UNIDO, German Development Cooperation and others. Our target is that within the next six months or one year, we want to see some measurable goals and achievements in terms of how far we have gone in affecting the lives of Nigerians using the SME platform,” he said.
    The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and IFC have signed a Memorandum of Understanding (MoU) to develop a seamless intervention between the provision/acquisition of entrepreneurial training and access to finance.
    The move is the duo’s commitment to further facilitate the access of micro, small and medium enterprises (MSMEs), to all resources required for their development in the country.
    The Director-General of SMEDAN, Alhaji Muhammed Nadada Umar, said at the signing of the MoU in Abuja, that the whole idea of the Agency’s partnerships with their relevant bodies was to soften the environment for MSMEs to grow.
    “The whole idea is to service MSMEs to help them surmount the challenges that confront them from embarking on, or pose as challenges during the course of their businesses,” he said.
    Also speaking at the second yearly SME live banking panel organised by the Bank of Industry and its partners in Lagos, Managing Director, Bank of Industry, Evelyn Oputu explained that the need to assess ideas from entrepreneurs was key in order to enhance their sustainability in the business environment.
    According to her, at least, 70 SMEs got their projects financed through the forum last year, even as the bank looks forward to multiplying the number this year through funding from its partners.
    She added that the exercise, which sought to develop new approaches and tools that generate sustainable financial empowerment for small businesses through coordination and alignment across all sectors, would assess the profitability of business ideas with a view to funding them.
    Oputu said, “BoI remains committed to helping the SME sector grow, but other financial institutions in the country also have to get involved in SME development.
    She noted that being at the forefront of activities to fund SMEs, BoI was well acquainted with some of the reasons why most SMEs don’t get easy access to funds explaining that most times it is not because the banks were not willing to fund them but rather because some SMEs do not have good business ideas that could be funded.
    She disclosed that BoI desires to see the growth of SMEs in the country, which is why the institution has continued to invest in the development of the sector including organising trainings for SMEs owners on how to develop good business plans which investors would be willing to fund.
    “We are doing this again this year because we saw the impact of the maiden edition, which was held last year and we will continue to create linkages between the SME and the financial sector because we want to see them grow, become sustained and globally competitive,” she said.
    In her remark, Dr. Robin Renee Sanders, a former US ambassador to Nigeria, commended the efforts of BoI for implementing innovative solutions to address the financial challenges of SMEs in the country. [dropcap][/dropcap] [dropcap][/dropcap] [dropcap][/dropcap] [dropcap][/dropcap] [dropcap][/dropcap] [dropcap][/dropcap] [dropcap][/dropcap] [dropcap][/dropcap]