The Group Head, W Initiative, Access Bank, Mrs. Ayona Aguele-Trimnell, in this interview speaks about the bank’s commitment towards supporting female-owned businesses by further offering discounted loans at 10 per cent in partnership with the Lagos State Employment Trust Fund. Nume Ekeghe brings the excerpts:
Can you speak about the Access Bank and LSETF partnership?
I feel very excited about this partnership as it has been ongoing for a few months and it took a little time to put it together so that it would be beneficial, not just to the bank, but to Lagos state as well as our beneficiaries. The W initiative is home to over 10 million female customers in Nigeria and probably the largest portfolio for female customers as well as female entrepreneurs. Since 2016 when we launched the W initiative, it was basically for it to be a non-stop shop for women entrepreneurs and so what we have tried to do over the last six years is to ensure that we actually serve three different categories of women. We have women professionals, women in business and women at home. Specifically, we are talking about women entrepreneurs and so what we have tried to do is not only funding but capacity building over the last 6 years and we have spent billions of naira in doing so. One of the reasons it was attractive and was approached by Lagos state and what is so exciting about this is that as much as they are giving billions out to women, we found a gap and the gap was that start up like one-year old companies find it a little bit difficult to come up with documentation required for getting funding. The second thing we found out was that the very small businesses were not able to access funding and so it was absolutely fantastic when we teamed up with Lagos state to see how we can serve women better. We all know that women businesses in Nigeria are 50 per cent of all the entrepreneurs we have in Nigeria. And this is a huge group but most of them sit slightly lower in micro and small businesses. What this LSETF initiative does is that we are able to provide funding and capacity building to companies run by women and are 1-5 years old and they can take loans as low as N500,000 – N1 million. So it is not only about the people asking for N20 million or N30 million, we are going all the way down. And in some cases, LSETF provides funding for amounts lower than N500,000. With Access Bank, we offer funding from between N500,000 to N5 million.
Can you highlight some of the features that differentiate between the existing W-Power loan and this new partnership with the LSETF. Is there a discount in interest rate?
This product has no collateral as we do not need any house or land to get the money and it is even further discounted. The W loan offers women funding at 15 per cent and with the LSETF, we are going lower to 10 per cent, so that they can grow their businesses. I think it is a fantastic offering and there are obviously some other conditions where the women have to own 50 per cent ownership of their business and they must have been in business from one to five years. And before now, this has never happened in the financial industry in Nigeria and so we are really trying to cater for all aspects of women in every level be it micro, small, medium or large, basically, what Access Bank is doing through its different partners is being able to offer women loans at any point of their business journey.
Can your existing customers in W-Power loan switch from refinancing their existing loans at 15 percent to 10 percent or this for new customer?
We have over 250,000 women businesses with the W power loan and a lot of them have been with the bank for years. And a lot of the capacity training that is being offered both to them and the LSETF loan is basically the same and is top class quality. You probably cannot cancel your W power loan and run off to get a LSEFT initiative. There are criteria, but again I cannot say if you have W power loan you cannot apply for LSETF. Obviously, it would depend on the capacity of your business or the capacity to pay back because it is not at the end of the day, free money. It is possible for also get another loan through LSETF if all the criteria are met.
Since inception, how has loan recovery been for women under this initiative?
Women pay back their loans and because we have been in this business long enough, we know that with women loan comes mandatory training and financial learning because you cannot run a business without knowing your profit, loss and what is coming in and out. So, if you are granted a loan, it comes with mandatory training because we know that if women get properly trained, the chances of them paying back are much higher. So, if you have loaned N500,000 and in one year you have repaid the loan, we would grant you more loans to grow and scale your business. It not a case where we just want to collect their money, we want the business to grow. Statistics have shown that most small businesses are the biggest employers of our youth in Nigeria. So, we have to make sure we get these companies to a position where they are sustainable. So, for us, capacity training is very critical to this program. Women pay back their loans better than men. Our non-performing loans is about two per cent. This is really good for female customers and that is why we are stepping forward to give these women more access to finance because they pay back. They know that their survival depends on the businesses they run. So, we have been very fortunate in W initiative that one of the areas we don’t worry about is payback. The default is very low. Also, in our W academy, we work with the women and we have a very close relationship with our customer. We are constantly involved in what they are doing. We are constantly offering them programs and financial training and anything to help grow their business. In some cases, we help with taxation, marketing and whatever would help them to not only grow their business but also pay back their loans. So, the default rate is pretty low and I think we have been very fortunate and we have had a very successful program.
How much loans have been given to women businesses through the W initiative?
In the last six years, we have given out over N500 billion to women businesses in Nigeria. The portfolio is always growing and is a moving part. So far, we have given these loans to about 250,000 women beneficiaries.
Is Access Bank looking at a possibility of extending this form of initiative outside Lagos?
This is a pilot project for Access bank and we want to do this in every state because Access Bank is one of the largest in Africa and we do not only serve in Lagos state, we serve in other communities and we have millions of branches across the country. Lagos state is one of the largest in the country and also an economic viable state and so we want to try it out here first and get it to work. We know it would work and I think it is something we want to replicate in other states. We know that other states are interested but for us, let’s do it right here first and then we can see how we would replicate it.
How much capital is Access bank and LSFET injecting to women businesses in this pilot phase?
We had matching fund. Initially, the matching funds was to be N2 billion from Access bank and N2 billion from Lagos state. But currently because we are just starting about a month ago, we have matching funds of N1 billion from Access bank and N1 billion from Lagos state government which is N2 billion accessible funds for female entrepreneurs at the moment