The Nation Newspaper

Tag: SMEs’

  • Edo seeks banking sector reform over SMEs

    THERE is an urgent need for a systemic overhaul of the banking sector so that it could do more for the small and medium enterprises (SMEs), Edo State Deputy Governor, Hon Philip Shuaibu, said at the weekend.

    Speaking in Lagos after receiving Outstanding Humanitarian Service Award presented to him by the Rotary Club of Mushin Metropolitan, he said there’s need to fight the scourge of poverty by providing potable water, health, education and other services to the electrorate.

    Shuaibu, who was special guest at the occasion, commended the immediate past President of the club, Rotarian Gregory Otsu for an accomplished tenure, saying the club has done great service to humanity.

    He stressed the need for improved palliatives to cushion the sufferings of the SMEs, especially in the area of access to funds from the lenders.

    He described local lenders as Depository Houses with little emphasis on financing SMEs, a situation he lamented, has led to the demise of small businesses with brilliant ideas.

    “Banks are collecting indirect collateral, because when you need a guarantor with like some amount you want to give out as loan to the SMEs, then, you are indirectly collecting collateral. That is not helping the economy. Remember, the SMEs today will become multinationals tomorrow.

    “Therefore, banks in Nigeria need overhaul in such a manner they will accommodate engineers, psychologists, sociologists and others with a touch in humanity, as against the present penchant to recruit ‘fine boys and girls’ with little understanding about business financing,” he said.

    He said without proper care for the SMEs, poverty would continue to multiply as has been seen in the economy.

    He said: “I am happy that what started about a year ago is coming to an end on a positive note. I am happy that Rotarian Otsu is handing over gracefully. It is my prayer that the incoming president will consolidate on your achievements and even perform better, because Rotary is about impacting lives or serving humanity.

    “I also feel honoured by the award given to me by the Rotary Club of Mushin Metropolitan. That is why I strongly believe we should cease from passing bucks rather work harmoniously to tackle issues around poverty- water, health, education and other related indices.”

    He said this measure has inspired programmes of Edo State. “Our goal is to reduce poverty. The government of Godwin Nogheghase Obaseki is on achieving economic prosperity for Edo State, which is a consolidation of Comrade Adams Oshiomhole’ achievements. We are working with private and corporate entities to make this happen.’’

    Earlier, the MD/CEO of LAPO Microfinance Bank, Dr. Godwin Ehigiamusoe, said technology will play a vital role in promoting financial inclusion.

  • Tecno: we’re commited to growing SMEs

    Original equipment manufacturer (OEM), Tecno Mobile said it is committed to helping small medium enterprises (SMEs) and other talented youths grow.

    Speaking at the grand finale of its campaign tagged: Tecno Mobile’s 2018 Light Up Your Dream, at its Ikeja, Lagos head office, its PR and Strategic Partnership Manager, Mr. Jesse Oguntimehi, said as a caring brand, the firm would continue to explore ways of giving back to the society.

    He said: “ Nigeria is filled with a lot of talented people that do not have the opportunity to bring that dream to the fore due to several reasons chief of which is finance. So, we are doing our bit by providing the finance to make things easier for them and we are very glad to get these young dreamers closer to their dream.”

    On the occasion, two  grand prize winners-Jeremiah Okoh and Henry Emeka Nnamani, emerged. They each went home with N1 million  and a brand new Tecno Spark  2 each. The contestants who were between the third and 10th bracket went home with brand new Tecno Spark 2 smartphones, while those between 11 and  20 position went home with brand new rechargeable fans.

    One of the winners, Okoh, a ginger agropreneur from Kaduna State, expressed gratitude to God and Tecno. With tears of joy trickling down his eyes, he said: “Standing here and holding this cheque is a dream on its own. I cannot believe this. I will invest this money in my business to grow it.”

  • Budgeting for SMEs

    Budgeting for SMEs

     

    INTRODUCTION

    Small business owners may run their businesses in a relaxed way and may not see the need to budget.  Budgeting is very important in running a successful business.

    Budget is a formal statement of the financial resources set aside for carrying out specific activities in a given period of time.

    Budgeting is the most effective way to control your cashflow and also allow you to invest in new opportunities at the appropriate time.

     

    IMPORTANCE OF A BUSINESS BUDGET

    Some of the benefits of budget include:

    • manage your money effectively
    • allocate appropriate resources to projects
    • monitor performance
    • meet your objectives
    • improve decision-making
    • identify problems before they occur – such as the need to raise finance or cash flow difficulties
    • plan for the future
    • increase staff motivation

     

    KEY STEPS IN DRAWING UP A BUDGET

    There are a number of key steps you should follow to make sure your budgets and plans are as realistic and useful as possible.

    Make time for budgeting

    If you invest some time in creating a comprehensive and realistic budget, it will be easier to manage and ultimately more effective.

    Use last year’s figures – but only as a guide

    Collect historical information on sales and costs if they are available – these could give you a good indication of likely sales and costs. But it’s also essential to consider what your sales plans are, how your sales resources will be used and any changes in the competitive environment.

     

    Create realistic budgets

    Use historical information, your business plan and any changes in operations or priorities to budget for overheads and other fixed costs.

    It’s useful to work out the relationship between variable costs and sales and then use your sales forecast to project variable costs.

    Make sure your budgets contain enough information for you to easily monitor the key drivers of your business such as sales, costs and working capital.

     

    Involve the right people

    It’s best to ask staff with financial/accounting responsibilities to provide you with estimates of figures for your budget – for example, sales targets, production costs or specific project control. If you balance their estimates against your own, you will achieve a more realistic budget. This involvement will also give them greater commitment to meeting the budget.

     

    BUDGETARY CONTROL

    For budget to achieve the desired result, there is need to put control measures in place.

     

    Budgetary control involves:

    • A control technique whereby actual results are compared with budgets.
    • Any differences (variances) are made the responsibility of key individuals who can either exercise control action or revise the original budgets.

     

    CONCLUSION

    Budgeting is a habit that every business owner must imbibe. It has been said that when you fail to plan, you plan to fail. Budgeting is an essential part of planning in any business. The rate of business failure will be reduced drastically if every entrepreneur cultivates this habit.

    Tomi Omojuwa

    tomiomojuwa@gmail.com

    08023459902 (WhatsApp only)

  • NCC: SMEs, innovators, others are growth engines

    • Prepares for ITU Telecom World 2018

    Small, Medium-sized Enterprise (SMEs), start-ups and innovators are engines of economic growth, the Nigerian Communications Commission (NCC), has said at the weekend.

    Realising this, this year’s focus by the International Telecommunications Union (ITU) and the Telecom World according to NCC, would be on them. Aside SMEs, innovators and their innovations are also slated to have a good showing at the event, which will hold in Durban, South Africa, between September 10 and 13.

    Nigeria had a good outing in ITU Telecom World 2017, Busan, South Korea, where five of the country’s SMEs/Innovators made the final ITU Global listing for SMEs/Innovators awards. Three of them made the honours’ list.

    As part of the plan for this year’s ITU Telecom World, the Local Organising Committee (LOC) published notices in the media recently, inviting Information Communications Technology (ICT) practitioners and SMEs operating as e-Environment, Technology Hubs, Innovation Incubators, e-Education, e-Health, e-Commerce, e-Finance, Youth Empowerment and Employment to enlist for participation at ITU Telecom World 2018.

    ITU Telecom World 2018 theme is “Innovation for smarter digital development”. The LOC said for SMEs/Innovators to be selected, “their tech-enabled solution must be creative, innovative, and globally relevant. Such products/services must also provide demonstrable impact or radical improvement in service delivery or processes to specific areas such as agriculture, education, health, governance, security”. Innovations must be unique, scalable and patented with a model to showcase.

    ITU Telecom World 2018 is an election year and Nigeria is vying for two positions: ITU Administrative Council and Director, in charge of Bureau for Telecommunications Development (BDT), which Mr. Williams Ijeh is a candidate.

    In April this year, NCC Chief Regulator and Executive Vice Chairman (EVC), Prof. Umar Garba Danbatta flagged off Nigeria’s campaign for the two positions when he hosted a dinner for high profile ITU personalities including Secretary-General, Mr. Houlin Zhao, officials of the global regulatory agencies, ministers, regulators and global dignitaries in Geneva, Switzerland.

     

     

  • Wema Bank empowers SMEs

    Wema Bank Plc has sponsored Small and Medium Scale Enterprises (SMEs) to a training on wealth creation organised by PriceWaterHouseCoopers (PwC).

    The event, held in Lagos at the PwC Business School, was meant to support the bank’s plan to grow the capacity of SMEs by building lasting relationships that help them grow into profitable ventures.

    The participants cut across the manufacturing, hospitality, renewable energy, retailing, agricultural value chain and education sectors.

    “The training featured experts from key growth sectors as well as business managers and successful entrepreneurs. Discussions and insights were shared and the subject matter experts touched on critical aspects of business building including bookkeeping and accounting to tax efficiency, raising funds for business and much more,” the bank said in a statement.

    Speaking on the bank’s decision to empower small businesses, Head of Retail Banking at Wema Bank, Dotun Ifebogun, said the lender believes in the growth potential of SMEs and will provide the required financial and non-financial support to ensure these businesses realise their potential.

    Recently the bank secured a combined $35 million from the African Development Bank and ICD to fund small businesses across the country. The bank also provides regular training, research on business-building strategies as well as offer tech driven solutions required to boost growth, enhance efficiency and sustain profitability.

  • ‘We approach SMEs with unique strategy’

    Fidelity Bank’s Managing Director Mr. Nnamdi Okonkwo speaks on the bank’s impressive performance during its financial year ended December 31, 2017 at an interactive session with Business Editors. Group Business Editor SIMEON EBULU was there.

    What is the bank’s roadmap for the next five years?

    Let me give you some historical background. If you look at where Fidelity Bank was as at end of 2013 and where we are today, you would have noticed some marked improvements. The bank has had a stable leadership in our 30 years of operations. I am the third CEO of the bank. The first CEO served   15 years and the second was there for 10 years. Both of them laid solid foundations for the bank before I took on the mantle of leadership.

    From day one the watchword is to keep the bank safe and that was the same gospel that was transferred to me to ensure that the bank’s capital adequacy is strong and also make sure that liquidity is also strong. At some point people thought Fidelity Bank was too conservative, but it was for good reason. It has enabled us to survive three or four cycles of crisis in the banking industry with us acquiring two banks in the process. When I came on board, it was clear to me that we needed to be mindful of these and management also agreed to retain these posture when we had our strategic retreat to strategies for the next growth phase.

    We said to ourselves at the retreat that we want to be the clear leader among tier-two banks. So, we crafted the medium-term strategic initiatives built around balance sheet optimisation, cost reduction, and increased digitisation. We were sure that if we remained focused on the implementation of these initiatives, we would achieve success. Four years down the line, we like the results we have achieved, even though we also realise that we are not yet where we intend to go, ultimately.

    Specifically, in answer to your question, in the next five years, we plan to break into the league of top five-six banks in the country today. This has implications for market share, number of customers, balance sheet size and all. We had a board retreat late last year to strategise and agree on the imperatives for achieving this goal and by God’s grace and the disciplined approach to the execution of the outlined initiatives, we will realise this goal.

    While I am not at liberty to completely divulge in details, our plans for the next five years, let me speak to some of the quiet changes and internal realignments that we have made in preparations for the future. Starting with governance, we ensured that as directors retired, both at the executive and non-executive board, we maintained quality by replacing them with equally very strong professionals from diverse backgrounds. If you take a look at our board, you will see high profile representation by people who have been in regulatory roles, from our Chairman, Mr. Ebi, a former Deputy Governor of the Central Bank of Nigeria (CBN), to a former CEO of a multi-national corporation, former CEO of a bank, legal practitioners, former Chief Risk officer of a bank, accountants and accomplished businessmen. On the executive side, the professional background of our directors also speak for themselves.

    We also started our mid-year audit last year. Nobody compelled us to do it. We are required to audit our account, once every year, but we did it on our own because of our future aspiration. We decided to adopt international best practices.

    Are you looking at organic growth, merger, capital raising or a combination of strategies? 

    We plan to grow organically, but that does not mean if we see a brownfield transaction, we will not do it. Getting to the top five-six league of banks is more important than just doing a combination to become such, which means you did not get there by deliberate efforts. But if we see an opportunity in the market that aligns with our goals, we will evaluate it, but that’s not our primary plan. On capital raising, as a bank, we have a policy set out by the Board which ensures that we remain above regulatory benchmarks.

    We used to know Fidelity Bank as a bank that handles big transactions. Why have we not heard about such in recent times?

    Apart from our reputation as an SME-friendly bank, Fidelity Bank has core competence in corporate banking. Fidelity is still financing the big corporates. On agriculture, we funded one of the biggest rice mills in Nigeria. It is located in Kano; we supported cocoa value chain in Ondo State, to name a few. We are also very active in the Food and Beverage industries, Construction, Oil and Gas, FMCGs, Iron and Steel e.t.c.

    What will be key drivers of  banks for going forward?

    It will depend on strategic focus of each bank. At some point, it was easy to make twenty per cent returns from treasury bills, we knew that was not sustainable; so expectedly, it has come down. Those who stay focused in their core business at a time like this, will remain profitable. For instance, if you look at our income distribution in 2017, you will see that we made about 25 percent of our revenue from non-interest income, which was as a result of investment in digital technology. We used digitisation to drive a lot of non-funded income. We also took advantage of our balance sheet optimisation to increase yield in short term instruments.We have also cautiously resumed extending credits to customers in the consumer/retail segments, following improvements in salary payments.

    You are strong in the SMEs’ sector that has not been de-risked in the banking environment and coupled with the issue banks  have with NPL, are you still going to lend to them while driving your NPL down to five percent?

    The NPLs you see in the banking industry are not even predominantly different from SMEs. Fidelity approaches SMEs from a different strategy. When we started supporting SMEs, we did not want to use risk asset penetration strategy. Businesses fail either because owners borrow for the wrong reasons or they don’t know proper book keeping and there is nothing tying them together and preventing them from behaving otherwise. When a significant percentage of businesses go bad, there will be a spike in bad loans.

    Because of this, about eight years ago, Fidelity set up a division to understand SMEs and train people in that area. The division was headed by a General Manager. We divided SMEs into general SMES and Managed SMEs. We use the cluster approach to manage people that have similar needs.You can have 500 people who have similar needs and talk to them as an association. Those that do not have proper book keeping, you make it clear to them that we need to see your business through your record keeping and we train them to imbibe and inculcate this habits.

    Recently, our people spent two weeks in Aba, in the shoe and leather segment of the market. Today, we have a thriving branch there, with the Bank of Industry (BoI) approaching us to do a collaboration. What they want from us is to use our office to provide money to support people in that market because our model is working. Now, if any member of the cluster defaults, the other members will come against him or her in mutually re-enforcing manner. Our products are specifically designed and if everybody in a particular cluster is facing bad time, we will know but in a situation, where only one person is not repaying, we know that person is doing something wrong. So, that’s the way we approach the cluster SMEs.

    For the stand alone SMEs, we have developed templates. For instance, if we check transactions across industry over a period of time, we can tell what kind of SMEs a business is, using account statements. That way we can query inflows and outflows and ask questions where there are gaps – we ask why you are not selling or are you deliberately stocking up, where were see stocks growing are higher than demand. Yes, we are that detailed!

    So, the awards we keep winning on SMEs banking is an outcome of a deliberate strategy.

     

  • Boosting growth prospect for SMEs, artisans

    Lagos is positioning itself as one of the leading economies in Africa amid a positive economic scenario. To sustain this, its Ministry of Wealth Creation and Employment has created programmes to support artisans and entrepreneurs with the potential to build competitive businesses, reports DANIEL ESSIET.

    While Nigeria’s small and medium enterprises (SMEs) continue to create numerous jobs and boost the country’s Gross Domestic Product (GDP), they face a myriad of challenges, which always hamper their growth.

    About 70 per cent of jobs created across the economy are said to have come from SMEs.  However, they are hindered by inadequate capital, limited market access, poor infrastructure, inadequate knowledge and skills and rapid changes in technology. Some of them have closed shops, while the existing ones are complaining about a hostile business operating environment. Consequently, SMEs have shown mixed results in their performance in recent years.  This has attracted government’s attention to consider developing policies and initiatives that will enable them survive, make profit and create jobs.

    Lagos is, however, taking steps to remove the obstacles on the way of SMEs’ growth. Addressing a ministerial press briefing in commemoration of the third year of Governor Akinwunmi Ambode’s administration, Commissioner for Wealth Creation and Employment, Mrs   Uzamat Akinbile-Yussuf said the government is taking steps to create  a  business environment, which enables  entrepreneurs  to  create new businesses  and  sustain  them from  start-up stage to growth and maturity.

    To close the financing gaps, she said the government, in collaboration with partners, has created initiatives to expand access to financial services among small enterprises.  Funders include Ibile Microfinance and the Lagos State Employment Trust fund.

    As the digital world rapidly evolves, making use of online marketplaces is increasingly integral to the success of Lagos’ diverse community of artisans and small businesses.

    To this end, the  state created the artisan virtual market platform project, an online portal, to connect skilled artisans and tradesmen with customers.

    The portal, she also added, is designed to address challenges faced by those in this sector by facilitating access to market and finance.

    Factored into the platform, she noted, are features for skills improvement, including training-vocational, numeracy and literacy to bridge the deficit in skills gap, which has plagued the sector.

    Working with the ministry towards the actualisation of the initiative is Flutter Wave Company, which is developing the platform/application and Microsoft Nigeria that is to host the platform in the cloud.

    Others include a paint manufacturer, Kansai Plascon Nigeria, which   is committed to training painters, who will be on the platform while Ibile Microfinance Bank and Sterling Bank are handling the payment gateway.

    The platform, according to her, will have tools that will expose the artisans to avenues for accessing loans through LSETF and other financial institutions. The Lagos State Residents Registration Agency (LASRRA) is to capture the artisans for the LASRRA number required for the platform.

    Under the Tradesmen and Artisans Capacity Building Scheme, she disclosed that 1000 artisans were re-trained last year in collaboration with the Lagos State Technical and Vocational Education Board (LASTVEB).

    The scheme, she explained, was to equip the participants with technical and entrepreneurial skills with a view to enhanceing their efficiency, competitiveness and productivity. It was held for eight weekends across the state in five centres of Ado-Soba, Agidingbi, Epe, Ikotun and Ikorodu.

    The state government recognises that the emergence of new technologies has created an opportunity to address the needs of society to attain sustainable growth and development.

     

    Techpreneurs

    The commissioner said the growing number of techpreneurs, which is taking root in the state, is strongly drawing the attention of capitalists and more established firms to the state.

    To this end, she said the state government, through the collaboration of Ministry of Wealth Creation and Employment, other Ministries, Departments and Agencies (MDAs), Ibile Holdings and other relevant stakeholders would be establishing an ICT hub in Yaba.

    She said the government has collaborated with Johns Hopkins University School of Advanced International Studies (JHU-SAIS) to explore opportunities in the area of youth entrepreneurship and technological innovation in the state.

    The partnership, she explained, will focus on convening a forum to give techpreneurs opportunity to pitch to an audience that will include, but not limited to venture capitalists, industry experts, United States based techpreneurs and the academia.

    The collaboration was aimed at leveraging work JHU-SAIS is doing as regards sub-Saharan Africa in the area of youth entrepreneurship and technology and bridge the divide across tech ecosystem.

    Riding on a series of engagements with JHU-SAIS, Microsoft, General Electric, among others, an ICT summit was held between  April 23 and 26, 2018 in Washington DC. She  said the government sponsored 15 Lagos based techpreneurs and start-ups to participate at the event.

    The theme of the conference was: “The Role of Technoprenuer in Lagos State: An emerging Smart City”.

    She said the  Ministry of Wealth Creation and Employment in collaboration with the Ministry of Health has designed a framework for the development of Health SMEs in the state and also secured approval of the State Executive Council for the programmes implementation which is about to commence.

     

    Health SMEs

    Health SMEs, the commissioner said is to collaborate with private sector to deliver quality health care services through the provision of financial support with the aim of creating wealth and employment.

    The development of Health SMEs, she added, is geared towards managing the Primary Health Centres (PHCs) that are non-functional to sustain the tempo of quality and affordable Health Care delivery to the  people of the state.

    She said the Ministry of Health has listed 45 under-utilised Primary Health Care (PHC) centres to kick start the programme with 12 private health service providers already identified and ready for takeoff.

    On graduate internship programme (GIP), the commissioner said last year’s programme was a pilot scheme with implementation in phases of 500 internship placement. She explained that 1800 candidates were screened while 910 were deployed to various private organisations.

    She said 460 interns were confirmed and accepted for the GIP. Out of those confirmed, 57were given either full employment or extension of internship for possible future employment with the organisation.

    In continuation of the project, she said a breakfast meeting was held in March with prospective employers and off-takers on the activities planned for this year’s internship programme.

    The programme, according to her, was facilitated by Employment Clinic International, with 100 organisations in attendance that have shown interest to off-take the Interns.

    Based on feedback from last year’s exercise, she said the GIS programme would be extended to six months, one month for training and induction; and five months internship with employers for the interns to learn more from the organisation they have been assigned, which might increase their chances of being retained.

    She said the ministry is planning a mindset re-orientation programme for 2,000 unemployed youths this year. The programme will include, employability skills training, career counseling, effective C.V writing, developing effective interview skills and job hunting strategy for the invited interns and Job fair as soon as possible. This is to prepare the candidate for this year’s GIS programme. 1,000 best participants on the programme would be giving Internship placement in the year as they would have been prepared for the work place through the training.

  • Boosting SMEs among Commonwealth countries

    Available statistical evidence is indicative of the strong correlation between SMEs, developed nations and hopefully-developing nations, particularly in their productive capacities and in the areas of job creation, poverty reduction and general societal well-being. Indeed, four out of five new formal positions in emerging economies, according to the World Bank, are direct products and outcrops of SMEs.

    Secondly, an appreciation of the challenges which SMEs are faced with in the Commonwealth will require a full grasp of the challenges SMEs are confronted with within individual member-nations. The distinction between the macro-level challenges on the one hand and micro-level challenges on the other, is both revealing and instructive: Though the combined Gross Domestic Product [GDP] of the 54 Commonwealth nations is 10 trillion United States Dollars, only 4 [or 7.41%] of these countries – approximated to the United Kingdom with US$2.6 trillion, India with US$2.4 trillion, Canada with US$1.5 trillion, and Australia with US$1.2 trillion — account for over 75%, while the other 50 countries [92.59%] share the balance of 25%. In the same vein, only 10 [18.5%] of the member-nations [the UK, Australia, Brunei, Canada, Cyprus, India, Malta, Pakistan, Singapore, and New Zealand) could be said to be outside the orbit of the so-called Third World economies, under which label the other 44 member-nations [81.5%] have been tagged.

    In the light of the foregoing, the policies and programmes of Commonwealth countries to support and grow SMEs must be designed to accommodate the vagaries and challenges within the various member-nations, including those of day-to-day management and development conflicts. In Africa, for instance, the realities of everyday governance and developmental challenges are underpinned by stability, policy, organizational, managerial as well as scientific & technological deficits and bottlenecks.

    Thirdly, listening to Bill Gates in a recent presentation, he indicated that one of the ways to get the right thing done is to learn from those who are doing it right, and emulate them. Within the framework of this logical perspective, it then becomes imperative that the Commonwealth nations should understudy the impressive & commendable economic strides achieved by the success stories, including the Republic of China.

    With the fastest recorded sustainable economic expansion than any other major economic power in modern history, China has grown its economy tremendously within a quarter of a century; from a GDP of less than a trillion US Dollars to a GDP of about 12 trillion US Dollars. China’s population is about half of the combined 2.4 billion population of the Commonwealth, but it has achieved these impressive records with industrialization and export as its back-bone.  Interestingly, SMEs contribute 70% of China’s export earnings as well as 60% of its 800 million full-time jobs.

    Fourthly, given the right policies and sustained, active support for SMEs across the Commonwealth countries, their combined GDP could well experience a phenomenal growth of up to 18 trillion US Dollars by the Year 2030. That year – in barely twelve years hence – is the deadline set for the attainment of the on-going Sustainable Development Goals [SDGs]. Such growth and expansion would enable the Commonwealth countries to create about 200 million jobs, which would be a third of the World Bank target of 600 million jobs within the said period. The total population of the Commonwealth countries is presently a third of the world population.

    In the final analysis, the right policies and programmes to support SMEs in Commonwealth countries will be anchored on the vision, commitment and political will of the leadership of the various jurisdictions.

    • Excepts from the Speech of former Governor of Anambra State Mr. Peter Obi at the Commonwealth Business Forum in London from 16th to 18th April, 2018

  • Important records to be maintained by SMEs

    Introduction

    Good record keeping is essential to efficient business operations for any SMEs. It is also critical for all legal related issues. Setting up a record keeping system is not exciting and doing paperwork can be time consuming. But creating and maintaining a well-organized system is easier than fixing a poor one.

    Some of the records that are very essential to most SMEs are classified below:

    Accounting and bookkeeping records

    • Sales and expense information
    • Income statements
    • Balance sheets or Statement of Financial Position
    • Cash flow statements and other financial statements

    Bank records

    • Bank statements
    • Bank reconciliations
    • Notices from and to your bank
    • Deposit slips and any loan related notices and documents.

    Contractual agreements

    • Contracts
    • Equipment leases
    • Purchase agreements
    • Sales agreements
    • Joint venture agreements and other contracts.

    Corporate records

    • Incorporation Documents such as Certificate of Registration/Incorporation, Memo and Articles of Association etc.
    • Shareholder Minutes and Consents
    • Board Minutes and Consents and amendments to the various corporate documents.
    • Partnership agreements where necessary

    Correspondence

    • Important letters sent and received by mail and important email that you want to make sure is not lost and should be kept in hard copy.

    Employee records

    • Employment applications
    • Actual employment offer letters
    • Employee handbook or policies
    • Performance appraisals
    • Employee attendance records
    • Employee resignation or termination letters
    • Any settlement agreements with terminated employees.
    • Staff Pension Records

    Forms used in the business

    • Local purchase order
    • Invoice and official receipts
    • Goods Received Note etc.

    Intellectual property records

    • Trademark applications
    • Copyright filings
    • Patent filings and patents
    • NAFDAC approval
    • Confidentiality or non-disclosure agreements.

    Marketing and advertising records

    • Marketing brochure
    • Print ads
    • Web banners
    • Radio jingles and other marketing materials.

    Permits and licenses

    • Permits
    • Licenses or registration forms needed to operate the businesses.

    Stock records

    • Stock Ledger where all stock and other securities transactions are recorded
    • Copies of stock certificates.

    Tax records

    • Income Tax
    • Withholding Tax Records and Credit Notes
    • PAYE Records and other tax related matters.

    Conclusion

    The above records are to be kept depending on whether the SME is a business name or a limited liability company. The records for the immediate past year and current year must be kept handy, while older records can be archived.

     

    Tomi Omojuwa

    tomiomojuwa@gmail.com

  • $2.5m coming to support SMEs

    Donors to the Fund for African Private Sector Assistance (FAPA) – consisting of the African Development Bank(AFDB), the Government of Japan and the Government of Austria – have approved three catalytic projects totalling $2,480,000(N891 million), to stimulate the growth of Africa’s small and medium enterprises.

    A statement from AFDB said the grants would help strengthen the participation of Africa’s SMEs in financial markets and the agriculture sector.

    “These three projects are well aligned with FAPA’s core mandate of supporting private-sector development in Africa, a key strategic priority of the African Development Bank. They augur well for job creation in Africa,” said Director of the Syndication, Co-financing and Technical Solutions Department at the African Development Bank, and Chair of the FAPA Technical Committee, Olivier Eweck.

    The first project, Regional Financial Market Development Support Project (Projet d’appui au développement du marché financier regional, PADMAFIR) – a FAPA grant of $980,000, will contribute to the modernization of the regulatory framework to increase competitiveness and strengthen the capacity of the regulator on new products, including securitization, diaspora bonds and green bonds. The grant will facilitate SMEs’ access to stock market funding and train commercial stakeholders to enhance professionalization. PADMAFIR is part of a long-term and ongoing multi-stakeholder partnership to develop the Regional Financial Market (stock exchange) of the West African Monetary Union (WAMU).

    The second project is for the Promotion of Factoring in Africa, through which an investment totalling $500,000 is deployed to finance the capacity-building of emerging factoring firms and the development of a sustainable knowledge and learning platform. The platform will provide capital to SMEs by financing their receivables. The African Export-Import Bank (Afreximbank) will contribute  $450,000 towards this technical assistance project.

    The third project is a grant of $1,000,000 for leveraging investments for fertilizer utilization amongst smallholder farmers in Africa.