By GODWIN DUNIA
Access Bank financial product for small and medium scale enterprises has come a long way in its efforts to keep them afloat in the face of harsh economic slump the country has continue to contend with for a while now. The financial help for Micro Small and Medium Enterprises (MSMEs) is an initiative, which was launched in January 2017, in partnership with the Women’s World Banking (WWB).
Access Bank is one of Nigeria’s foremost driver of financial inclusion, providing enhanced customer experience through innovation and technology, and regarded as a supporter of small businesses through SME lending, capacity building, business seminars, and workshops.
In August 2018, before the merger of Diamond Bank/Access Bank, the initiative has demonstrated its support for SMEs with the disbursement of over N1billion under the cash flow-based SME lending scheme. According to information made available to BusinessHallmark, the bank had disbursed a total of ₦267million during the pilot phase of the scheme, and additional ₦750million between June and August 2018.
Remarkably, all the loans disbursed under the scheme to the 550 small businesses were performing, despite the recipients of the facilities being first-time borrowers. The financial product is a cash flow-based MSME lending methodology, which has a strategic focus on cash flow, net asset capacity, character and business proficiency of SMEs as a means of determining
their eligibility to access credit.
The then Chief Executive Officer of Diamond Bank, Uzoma Dozie, said Diamond Bank had resolved to develop innovative ways of advancing financial inclusion in Nigeria.
“It is a signal to many more successes to come, as we push through our technology-driven retail-focused strategy, designed to position the bank as the most profitable and fastest growing retail bank franchise in Nigeria by the year 2020.
“We are confident that the future of retail banking belongs to banks with disruptive business models and solutions that deliver superior customer experience through strategic alliances as well as create life-style-focused products, processes and channels.
“We pride our financial inclusion strategy as the most robust and customer-centric in the Nigerian banking industry and will achieve more milestones through data-based initiatives that are simply, Beyond Banking.”
Also following the merger in April 2019, at an event organised by Access bank, the Executive Director, Retail, Victor Etuokwu, had also told health practitioners that, the bank has provided over N1bn to finance health practitioners in the Small and Medium Enterprises sector of the economy. And that it would provide more financial support for businesses operating in various sectors of the economy.
He said as one of the financial institutions with the highest loan portfolio to small and large scale businesses, increasing its lending support to the private sector would further boost the performance of the economy. And the programme was the first business workshop after the merger with Diamond Bank, noting that the bank remained committed to providing the much needed financial support to businesses.
“As a bank, we have a role to support the economy anyhow we can and how we do that is by empowering our customers. We empower our customers by helping them to access finance; we also help them in capacity development by training them to do their businesses better. We also teach them about basic banking services.
“We have brought our partners to talk about how they can effectively run their businesses well and manage their finances better. We have a huge portfolio where we lend to businesses. Access Bank has the highest loan book in the industry at over N3tn. As you know, with our merger with Diamond Bank, we are going to lend more to SMEs and I can say that as it is, we are the bank for SMEs.”
The bank has also played a leading role in partnering with domestic and International bodies such as The Gates Foundation, MTN, Medical Credit Fund (MCF), and Entrepreneur Development Centre (EDC) among others to create easy access to financial services for the unbanked.
As a cash flow-based SMEs lending methodology, the financial product has a strategic focus on net asset capacity, character and business proficiency as a means of determining eligibility to access credit.
Currently, Nigeria has over 37 million micro small and medium enterprises (MSMEs), all of which account for 84% of the workforce population in Nigeria and it account for 48.5% of the GDP of the country and also represent 7.27% of goods and services exported out of
To Access Bank, despite these impacts of SMEs on the economy, the sector has barely scratched the surface of its potential. The bank cited the reason as inability for the operators to access credit facility, which the bank believe has been a pain-point for entrepreneurs in Nigeria.
Also, Business Analysts are of the opinion that some of the reasons for the slow pace development of our economy had been as a result of lack of credit facility. They agreed that “access to funds has been an uphill task in Nigeria, which also account for the unfriendly nature
of the business environment,” according to Mr. Tunde Eza, a Marketer and Analyst, who spoke with BusinessHallmark.
Eza is of the opinion that, “the idea of Access financial product is a lofty one and government should encourage such and make it a priority of banks in the country to enable business development”. He said that must be reason behind Diamond Business Advantage proposition which has also been strengthened by Access Bank as a result of the merger.
Also, the bank’s financial advantage initiative was borne out of the fact that banks are constantly criticized for their lack of support for SMEs. And Access Bank is reiterating its commitment to the MSME business community with the Business Advantage account, giving various start-ups, regardless of their sector, leverage to compete better for growth in markets determined by financial capability.
The initiative has continued to assist emerging businesses for growth without worrying about capital to meet operating expenses and other business-related costs. The financial product has been tailored to meet different funding needs; basic, growing and established businesses. The Business Advantage also offers non-financial services such as helping start-ups make better business decisions, manage cost, and assist in structuring their services to meet local and international markets’ demand.
According to information made available to BusinessHallmark the benefits of the initiatives include: Access to the full bouquet of borrowing solutions for business growth and to online and offline business management training & networking opportunities; access to your dedicated business partners for business advisory; enjoy access to over 50 courses on the SME Zone and Invitation to monthly Business Webinar and Newsletter.
Others include: Sector-specific loan solutions to help meet your business needs; capacity building forums to equip you with the knowledge to manage and grow your business; networking and access to market opportunities and business management solutions and learning platforms.
However, these benefits are not limited to one sector only, they cut across Agriculture, Trade (Wholesale and Retail), Education, Real Sector/Manufacturing, Hospitality, and Health.
SMEs in these sectors are entitled to these benefits through the Accessing the Business Advantage Account. The Business Advantage proposition is segmented into three account-types to carter for all funding needs: Basic, Growing and Established.
The basic credit package is created for micro and small businesses; Account opening balance is N10,000, and minimum operating balance of N5,000; maximum turnover of N4 million allowed and a monthly subscription fee of N2,000+.
The Growing credit package is also for Small and Medium businesses. And it is for new and growing businesses with a monthly turnover of N4 million to N12 million. Account opening balance of N15,000 with a minimum operating balance of N10,000 and a monthly subscription fee of N4,000+.
The Established package is for business owners, who have been offered this premium offering to enable them expand further. For established businesses with a monthly turnover of N12 million to N50 million, Account opening balance is N35,000 with a minimum operating balance of N25,000 and a monthly subscription fee of N7,500+. These packages enable account holders to access funds needed for their business growth, eliminating various pitch stages that usually characterize credit opportunities.
By just opening a DBA account with the required turnover and minimum operating balance, account holders have access to credit. With this financial product, MSMEs can easily attain their full potential.
Speaking on the impact of the facility on operators of SMEs, a staff of Access bank, who spoke to BusinessHallmark un-identified, said “the loans are accessible within a limited time frame. If you want to apply then you get more information. That is all I can tell you.
“It is an opportunity in this era where access to credit facility is getting tighter while small businesses continue to add up by the number. Access Bank has chosen to be the one-stop shop for credit needs, as well as an intermediary for other financial sources under the Central Bank of Nigeria (CBN) with collateral-free lending and low interest rate ”he concluded.