Offering Succour to Business Owners

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There is an increasing focus on supporting operators of micro, small and medium scale enterprises so that they can compete favourably, writes Peter Uzoho

Micro, small and medium scale enterprises (SMEs) are globally regarded as the backbone of any economy. In fact, MSMEs in developed economies, especially in Asia, are widely known for their innovation, competitive edge and strong links to global enterprises as more than 97 per cent of business entities in these countries are MSMEs.

Indeed, MSMEs contribute to improved living standards, bring about substantial local capital formation and achieve high level of productivity and capability.
They have also been identified as a vehicle for employment generation and providing opportunities for entrepreneurial sourcing, training, development and empowerment. Developing nations such as Nigeria characterised as low income earners by the World Bank, value MSMEs for several reasons.

However, in Nigeria, because of some challenges in the economy, a lot of MSME operators in the country find it very difficult to effectively play their role.
Some of these constraints have been identified to include competition, infrastructure, taxes, accounting, management, marketing, economic, planning and finance.

In Nigeria, poor economic conditions, which also implies poor finance and inadequate infrastructure, have been identified as the most crucial factors.
No doubt, access to finance at relatively cheap cost is also one of the most crucial problems hindering MSMEs to have significant contribution to national output in Nigeria.

Therefore, in order to tackle some of these challenges, Access Bank Plc has enhanced its banking proposition for operators in the subsector.
The bank has reiterated its resolve to continue to offer solutions to its customers, especially operators of MSMEs. This was one of the reasons it has strengthened its Diamond Business Advantage (DBA) proposition.

This product covers a unique financial product tailor made to suit any stage of business, and a range of non-financial services that helps businesses make better decisions, manage cost, access finance and grow your business across local and international markets.

In addition, the Diamond Business Advantage offers convenience, value and flexibility for the entrepreneur and his or her business.
Available in three variants, the solution gives customers of the bank the freedom to upscale as their business grows.
For instance, for a basic micro enterprise, what is required is an account opening balance of N10,000; minimum operating balance of N5,000; maximum turnover of N4 million and monthly subscription fee of N2,000 and above.

On the other hand, it offers flexibility for new and growing businesses with monthly turnover of N4 million to N12 million; account opening balance of N15,000 with minimum operating balance of N10,000 and monthly subscription fee of N4,000 and above.
Similarly, it also has offerings for premium businesses and organisations with larger turnover of N12 million to N50 million monthly as well as an account opening balance of N35,000 with minimum operating balance of N25,000 and monthly subscription fee of N7,500.

Highlighting the benefits of the DBA, the Executive Director, Personal Banking, Access Bank, Mr. Victor Etuokwu, said it also provides access to the full bouquet of borrowing solutions for business growth; access to online and offline business management trainings and networking opportunities; access to dedicated business partners for business advisory; access to over 50 courses on the SMEZone among others.

In addition, the non-financial services include sector specific loan solutions to help customers meet their 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.

“We understand that businesses need access to funding, and we have designed different loan options based on your business sector. There is also a banking plan designed for the unique requirements of professionals in the health sector.

“It can simplify your business banking, so you can focus on what you do best. Access Bank provides banking plans for the following professions: dentists, medical doctors, veterinarians, optometrists, diagnostic labs, pharmacist, medical laboratories, among others,” he added.
According to the executive director, the Mediloan QualityCare program is a partnership between Access Bank and the Medical Credit Fund to provide financial support and advisory services to healthcare organizations. Under the Mediloan QualityCare Program, customers can access funds at friendly interest rates.

Agriculture
Beside crude oil, agriculture remains the mainstay of the Nigerian economy employing about two-thirds of the entire labor force and provides the main source of livelihood for most of the populace.
This had led to the bank’s active participation in various federal government initiatives to provide long tenured financing and at single digit interest rate to the sector.

Owing to this, under the DBA, Access Bank has internal financing opportunities for operators in the sector. Some of the available programs include the Commercial Agriculture Credit Scheme (CACS), which is a Central Bank of Nigeria (CBN) low cost (9% interest per annum) interest on-lending scheme targeted at medium to large scale agribusinesses seeking to expand their businesses for optimal production and profitability.

Fund is currently targeted at rice, oil pal, fish, sugar, cotton and dairy value chains
In addition, the bank is open to supporting the Nigeria Incentive-Base Risk Sharing System for Agricultural Lending (NIRSAL), an initiative of CBN, the Bankers’ Committee (BC) and Federal Ministry of Agriculture & Rural Development (FMA&RD), aimed at promoting lending to agribusinesses through value chain facilitation, capacity building and provision of interest rebates to agribusinesses.

In the same vein, the DBA solution supports operators in the Agricultural Credit Guarantee Scheme (ACGS) which is managed by the CBN with the aim of promoting lending to agribusinesses through banks. The scheme also provides interest rebate to customers that meet loan repayment as and when due.

It also offers businesses financing opportunity from the central bank’s micro, small and medium scale enterprises development fund (MSMEDF), a N220 billion fund set aside to provide low cost finance to MSMEs in the manufacturing, agriculture and renewable energy sub sectors of the economy at single digit interest rates (9% per annum).

The DBA also finances the Anchor Borrowers’ Program (ABP), an initiative of the CBN, leveraging N40 billion fund set aside for the scheme from the N220 billion MSMEDF to provide low cost finance and access to market for organised/cooperative of small holder farmers and medium sized agribusinesses at 9% interest per annum.
“It also covers the Access Export Finance (DEF), which is an Access Bank export financing facility which provides credit facilities to exporters of raw materials, semi-finished and finished non-oil products of Nigerian origin.

Education
High quality education is often attributed to schools having state-of-the-art infrastructure and modern amenities.
“At Access Bank, we provide a collateral-free finance product for private crèche, nursery, primary and secondary schools that are duly approved and registered by the Ministry of Education and Corporate Affairs Commission.

“Under this initiative, the schools have Access between N1 million to N10 million with termly repayment structure.
“The funds can be used for renovation and facilities development, purchase of teaching aids and equipment procurement, staff salaries, purchase of school bus, generator set, etc.
“It can serve as financing for procurement of artificial grass turf for the beautification of school premise and comes with competitive interest rates and tangible collateral not mandatory,” the bank explained in a report.

Hospitality/Real Sector
There are also loans tailored to meet the asset financing needs of players in the hospitality sector. It is available for hotels, restaurants, bars and guest houses, lounges etc.
Some of the benefits available for SME businesses in the hospitality sector that have operated in current premises for minimum of two years include access to between N1 million to N20 million for the purchase of industrial sized assets only, which has tenor of up to 24 months
For real sector operators, the financing solutions include a revolving credit in form of a line of credit or term loan for short-term financing (maximum one year), with competitive interest rates; business instalment loan with competitive rates for expansion, new equipment purchase and technological innovations available for up to three years and local purchase order (LPO) finance to carry out supply requests.

Others include contract finance for the execution of contracts from approved list of companies.
Finance is available for a variety of legitimate contracts awarded by government agencies and reputable private organisations in the country operating in the different sectors and contracts with varying levels of complexity.

For its wholesale and retail customers in trade, some financing solutions under the DBA includes a revolving credit in form of line of credit or term loan for short-term financing (maximum one year) with competitive interest rates, business instalment loan with competitive rates and LPO finance to carry out supply requests.
The foregoing and the bank’s support for MSMEs in almost all segments of the economy shows its commitment to nation-building and economic development.