Funding has remained a major challenge faced by Small and Medium Enterprises (SMEs). Lack of infrastructure, logistics and workforce are others faced by SMEs operators. To surmount these challenges, Stanbic IBTC Bank has intensified its capacity building schemes with SMEs to enhance their business ideas, customer engagement, funding, book keeping and tackling regulatory issues, writes COLLINS NWEZE.
Capital is perhaps the most important factor driving the growth of Small and Medium Enterprises (SMEs), but not the only factor. In Nigeria where SMEs generate their own power, logistical structures and other key infrastructure, chances of failure remain high, unless SME operators are equipped with the right skills and support to navigate the challenges.
The general view is that over 70 per cent of new businesses in Nigeria do not survive beyond the first five years of their establishment due to the numerous challenges they encounter.
Apart from access to finance and operational challenges, enterprises also need to enhance capacity, which is one of the main impediments to growth. Many businesses struggle with book keeping, which means lenders or investors struggling to assess the business viability. Also, their inability to determine their target markets and execute the appropriate strategy means resources are dissipated without delivering the desired objectives.
A major impediment to business growth in Nigeria, according to experts, is capacity building, contrary to mostly held view on financing by many business owners. Capacity building encompasses various aspects of business _ from business ideas, customer engagement, funding and book keeping to recruitment, logistics, sales and marketing to regulatory and environmental issues, among others.
At the core of capacity building is the need to provide the needed tools for developing business sustainability. Executive Director, Personal and Business Banking, Stanbic IBTC Bank, Babatunde Macaulay, said businesses needed the “right support in terms of infrastructure, financing and capacity building” for sustainability.
This explains why recent interventions by the government and private sector players to develop a strong and sustainable enterprise sector have largely been geared towards capacity building. Stanbic IBTC Bank, for instance, organises yearly nationwide enterprise workshops in several cities across the country.
“The enterprise sector is pivotal to the economic growth and development of a nation. In recognition of this, we developed the seminar series to provide innovative marketing, financial and management skills that are useful to businesses and provide the skills needed for such businesses to grow,” Macaulay said.
He explained that over 8,000 business owners have been trained at the yearly capacity building sessions and the figure is exclusive of those who have benefited from the bank’s strategic digital business training carried out in partnership with Google and others.
Stanbic IBTC Bank believes that enterprises need strong hands to steady them as they take their first tottering steps. “In more advanced economies, governments undertake massive enterprise development and promotion through loan guarantee schemes and tax incentives. A key pillar of governments’ enterprise drive in such climes is the linking of enterprises with appropriate technologies and educational institutions. What this does for the businesses is to reduce the burden of sourcing human capital and technology, as well as enabling them to tap into a steady stream of vital research works that are relevant to their operations. The results of these interventions are often impressive, with enterprises becoming the engine of growth and transformations,” the bank said.
Continuing, the bank said: “Businesses need cash. They equally need advisory services, business and networking opportunities, as well as human capital and marketing. The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), established in 2003 by the Federal Government, was set up as a co-ordinating agency for enterprises, helping to link ideas with finance while exposing businesses to opportunities. With a survey that shows Nigeria as home to 17 million enterprises, providing a structure for those businesses to thrive becomes a priority. The government realised quite early that it may not achieve much in developing a robust and thriving enterprise sector, which is why private entities are encouraged to pitch in.”
Stanbic IBTC, in keeping with its tradition of promoting businesses, took up the challenge to help mold a robust, digitally savvy, and profitable enterprise sector. The Bank’s approach is very interesting. It has developed a unique value proposition to support businesses with transactional products, savings and investment solutions, lending products and wealth protection solutions. Underpinning all these is an investment in technology, designed to make banking easier for its enterprise clients. Apart from using best-in-class payment solutions, the bank had equally launched an internet banking offering specifically for enterprises.
“To help clients improve operations,” Macaulay explained, “we believe a migration to digital banking will reduce the challenges faced by customers and help them run more efficient businesses. Instead of spending time travelling to visit our branches, we have created a platform called Enterprise Direct for customers to fulfill their banking transactions by telephone and email.”
Highlighting some of the features and benefits of Biz Direct, Stanbic IBTC explained that it is branchless banking, with the ability to engage the bank from anywhere with a phone call or email. On the platform, customers can save cost via a zero current account maintenance fee to help optimise cost.
The Biz Direct allows businesses in the country as well as from all over the world interact with the bank. The Biz Direct, which is a virtual centre where well-trained bankers interact with customers by telephone and email, is the first of its kind in Nigeria. According to Macaulay, “It is a testament to the bank’s focus on enterprises that it created a fully dedicated centre to handle enquiries, requests and all other banking needs of enterprises”.
Equally important for enterprises is Stanbic IBTC’s second approach to capacity building through collaborations. The most recent is the collaboration with Google to train over 1,000 young entrepreneurs and enterprise operators in eight cities on digital skills in 2016. “By organising the capacity building sessions in different parts of the country, the partners hope to build critical mass of businesses through increased adoption of digital technology and enhance their contributions to economic development,’’ the bank said concerning the collaboration.
According to Stanbic IBTC, while launching the virtual business centre, “Enterprise Direct” will change how banks interact with their clients. The era of depending on physical branches to serve clients, the bank said, is disappearing, and technology will be the major driver of customer engagement in the future. “The future of banking is certainly interesting, and with innovative solutions like Enterprise Direct, the future of businesses in Nigeria is certainly assured,”the bank said.
Views from SMEs customers
The SME sector is pivotal to the economic growth and development of any nation and Nigeria is no exception. That explains why it is important that operators get the right support in terms of infrastructure, financing and capacity building.
Stanbic IBTC Bank sees the symbiotic roles of the Small and Medium Scale Enterprises sector and financial institutions. To buttress this assertion, the bank, in an ongoing testimonial campaign, features some of the businesses it has partnered in terms of supporting them with banking solutions, advisory services and facilities across the country. The campaign has not only shown the bank’s strong footprint in the SME sector, it has also helped to disapprove a generally held but erroneous notion that financial institutions hardly support enterprise to grow.
The testimonial campaign started early last year, covering the North, West, and now the Eastern market. It features real and known businesses across the country, from the south, the north, the east that have benefitted from Stanbic IBTC Bank’s partnership and support.
Mrs. Omoyemi Chukwurah of Seams and Stitches, who spoke on the impact of the bank’s support for her business, said the lender gave her wings to fly. Also, Jifatu General Enterprises Nigeria Limited Managing Director, Sabitu Yahaya, said out of all the banks he approached, only Stanbic IBTC Bank understood his need for business perpetuity and it was easy for him to make it his bank.
On radio, owners of featured businesses were engaged in short interviews on their relationships with Stanbic IBTC Bank and their impression of the bank. They were all effusive in their commendation of the bank while highlighting some of the beneficial traits that endeared them to the bank.
The lender is also not new to pushing the dial of service quality and delivery, customer relations and satisfaction. The Stanbic IBTC Group is a pacesetter in innovation across the entire spectrum of financial services from retail and corporate banking, pensions, assets management to trusteeship, insurance brokerage, stockbroking and custodian services. It continues to simplify its processes to ensure that customers are better served. Only recently, the bank expressed its willingness to digitise its entire operations when it launched the first self-service digital bank branch in the country.
Stanbic IBTC Bank Chief Executive, Demola Sogunle said the bank had long embraced digitalisation to strengthen its operations and processes, make them more accessible, efficient and cost effective.
The bank had also sought collaborative efforts to help SMEs achieve capacity building. For instance, last year, it collaborated with Google to train over a thousand young entrepreneurs and SME operators in eight cities on digital skills. “By organising the capacity building sessions in different parts of the country, the partners hope to build critical mass of businesses through increased adoption of digital technology and enhance their contributions to economic development,’’ the bank had said of the collaboration,” he said.
A sound knowledge of and robust approach to business management will, no doubt, ensure the survival of SMEs. Focusing only on finance may not augur well for the growth and development of small and medium enterprises. Stanbic IBTC Bank clearly understands this hence, the desire to promote businesses by providing financing, helping with capacity building as well as assisting their marketing drive as the testimonial campaign has shown.
