Fidelity Bank, SMEDAN sign MOU to empower MSMEs

FIDELITY Bank plc has signed a Memorandum of Understanding (MoU) with the Small and Medium Enterprises Development Agency (SMEDAN) in a bid to, among other things, empower Micro Small and Medium Enterprises (MSMEs) to contribute to job creation and poverty alleviation in the country.

Speaking at the SMEDAN partnership MOU signing ceremony held in Lagos, the Managing Director/Chief Executive Officer, Fidelity Bank Plc., Mrs Nneka Onyeali-Ikpe said the MOU reinforces the fact that the lender is an SME-friendly bank.

Represented by the Executive Director, Lagos and South-West, Fidelity Bank, Dr Ken Opara, Onyeali-Ikpe disclosed that Fidelity Bank has created a lot of structures to support the sector, some of which are the training programme through the Fidelity SME Academy, radio programme, and the bank’s funding scheme as well as facilitation of access to the market.

She said through the SME Academy, “We provide tailored business advisory services in various forms depending on what works best for the target eligible MSME customers/group of MSME customers.”

Small business owners often think that financing is a huge problem, but Onyeali-Ikpe stated that the bank has discovered that apart from finance, they need to put the right structure in place and also build knowledge and understand their businesses.

“We have signed this MOU today to build up capacity which involves training programme, certification and collaboration in some other key areas that will help them improve on the areas that they have been having issues as it relates to their structure.

“Already, we have positioned ourselves to support these SMEs. We have a training programme through the SME academy that supports them as much as possible.

“More importantly is that even though they are large, they are in clusters. You have those operating along one geographical region. You also have those that have similar businesses.

“So, we understand those clusters, create products that address those people. We are not going to be dealing with them one-on-one, but they are going to have SMEs that  grew up in clusters and that way, we attend to their needs, understand what their issues are and provide those solutions and the system,” she added.

Some of the structures put in place by the bank to empower SMEs include; one-on-one business advisory sessions; scheduled training sessions/seminars on identified areas of business management; virtual advisory sessions; among others.

Also speaking, Olawale Fasanya, Director-General/Chief Executive Officer of Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), thanked Fidelity Bank for facilitating the partnership, saying that overtime, “we now know where the shoe pinches more in growing businesses.”

According to him, the MOU was particularly significant not just to the Agency but to the MSMEs ecosystem.

Specifically, Fasanya observed that there was no doubt that Fidelity Bank is one of the few commercial banks in Nigeria that have shown immense interest in providing support to the large MSME community.

“I am very aware of some of your products purposely designed to serve the MSMEs. This explains why the Agency is very excited entering into this relationship that we believe will help change the narratives of the sub-sector.

“The Agency is confident that the Memorandum of Understanding will be kept active providing opportunities for reviews at intervals,” he stated.

The number one challenge, according to him, that the MSMEs have complained about over time as a major constraint is the access to funds to either start or grow their enterprises.

Fasanya made reference to the 2020 survey on MSMEs, jointly conducted by SMEDAN and the National Bureau of Statistics, which showed that limited access to funds was the biggest challenge at 27.9 per cent, far ahead of other challenges such as weak infrastructure, inconsistent policies, among others.

The study also revealed that most of the MSMEs (59 per cent) relied heavily on personal savings to start and grow their businesses.

While banks are supposed to spearhead a funding revolution for businesses, especially the MSMEs, the general trend is that most commercial and even development banks shy away from funding enterprises captured within the MSME space, Fasanya lamented.

Worst hit, according to him, are the Nano and Micro enterprises. According to the World Bank, Nigeria’s financing gap for MSMEs is estimated at $158.1 billion and it is in this area that SMEDAN is eagerly seeking partnerships to close up the gap, the SMEDAN DG stated.

Nevertheless, “We are aware that some banks have come up with innovative solutions to provide tailored financing windows to viable enterprises within the MSME space.

“Our findings have, however, revealed that Fidelity Bank loan portfolio to MSMEs is one of the biggest from the commercial banks. The Agency is aware of the risk component hence, our proposal/offer to provide BDS to some of the MSMEs that have benefited from your products across the country.’

For emerging markets such as Nigeria, access to capital should be fast and seamless.

Digital tools are improving the speed and ease with which credit can be disbursed and SMEDAN is willing to partner with as many funders as possible.

Fasanya further said that the day was therefore very memorable not just to SMEDAN but also to the entire MSME community and other enablers as the expectations are high that the narrative would soon change especially as it concerns MSME funding.

“I am confident that the support by Fidelity Bank to MSMEs will allow other funding institutions to follow your trail,” he further emphasised.

 

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