FBN Unveils COT Free and Non Collateral Loans For SMEs | Bizness Watch

FBN Unveils COT Free and Non Collateral Loans For SMEs

Small  and Medium Scale Enterprises just got a boost from First Bank Nig Plc  as the bank has unveil has once again shown commitment to national development by ensuring that  Small Medium and Small Scale Enterprises are guaranteed their sustainability in the marketplace.

 

Understanding the business terrain in Nigeria and the difficulties associated with funding of businesses, First Bank of Nigeria Plc is giving Small and Medium Scale Enterprises (SMEs) opportunity to grow their businesses.

Over the years, so much emphasis have been laid on the issue of unemployment in the country, the resultant effect of this is that the country has succeeded in producing graduates who have become unemployable, not because they are not educated but because they cannot express their God-given talents as a result of constraints within the system which includes availability of funds.

Even when funds are made available the conditions attached to the funds do not avail operators of micro, small and  medium scale businesses the opportunities to access the funds. The operators usually complain of high lending rates by deposit money banks in the country which they claim deny them access to credit facilities, thereby leading to the collapse of many small businesses. Some deposit money banks charge as high as 19 per cent to 25 per cent interest rates on loans given to MSMEs, a development, which operators described as “destructive” to indigenous businesses.

It is against this backdrop that FBN reeled out its loan facilities that have little or no burden attached to its accessibility. The plans were revealed at the maiden First Bank SME Connect National Conference held in Oriental Hotel, Victoria Island, Lagos on November 26, 2013 with the theme: ‘SMEs at the Heart of National Development’. The bank has progressively demonstrated that its product offering transcends the regular lending, deposits, trade and treasury products, to the development of financial solutions that enable business owners serve their clients efficiently. This ultimately empowers them to make informed financial decisions for sustained business success.

First Bank is committed to providing the Nigerian SMEs with the support needed for growth. According to FBN, SME Connect is created to bring under one umbrella relevant resources, products and services aimed at helping SMEs in Nigeria. It has tailor-made products targeted at the specific needs of SMEs in Nigeria. These loan products have been designed for financing the activities of Small and Medium Enterprises (SMEs).It also provides Business Advisory and Support services and business oriented credit access.

First Bank’s value proposition to SMEs is focused on empowering SMEs and SME entrepreneurs. It is geared towards building the capacity of SMEs to deliver business goals and contribute even more significantly to national development. The value proposition goes beyond an SME product or suite of products to a robust engagement programme designed in every way to help SMEs succeed. SMEs are given access to dedicated Relationship Managers (RMs) with deep industry knowledge of the customer’s business and pain points, and can offer basic advisory services to the customer. They are also offered a free payments-and-collections platform to drive the payment and receipt aspects of their business and deepen their transactional capabilities and speed. SMEs are also given web presence for free on 3AL.com – a social commercial online portal to enable them trade as well as network.

 

This feat achieved by the FBN is geared towards complementing the drive and policy of the Central Bank of Nigeria (CBN). It would be recalled that according to the CBN, in 2012, Nigeria had about 17.6 million MSMEs employing about 32.4 million people, and contributing about 46.54 per cent of nominal GDP. A recent survey by IFC and Mckinsey (2010) suggests that 80 per cent of these MSMEs are excluded from the financial markets. Suffice it to say that between 2003 and 2012, commercial bank loans to small scale enterprises dropped at an exponential rate. Analysis of the annual trend in the share of commercial bank credit to small-scale industries indicates a decline from about 7.5 per cent in 2003 to less than 1% in 2006 and a further decline in 2012 to 0.14 per cent which shows and unhealthy business trend.




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