Fidelity Bank: Financing women-owned MSMEs to grow economy

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Women entrepreneurs are the glue that hold their families, communities and even local economies together through small businesses. But there is the problem of financing women-owned MSMEs which Fidelity Bank has stepped in to address, writes Ime Akpan.

Small businesses are powerful drivers of economic growth, but many micro, small, and medium enterprises (MSMEs) operators lack access to the capital they need in order to expand. Women-owned MSMEs are particularly affected by this credit gap.

A 2013 report in ‘Interdisciplinary Journal of Contemporary Research in Business’ reports that women produce over 80 per cent of the food for sub-Saharan Africa, 50-60 per cent for Asia, 26 per cent for the Caribbean, 34 per cent for North Africa and the Middle East, and more than 30 percent for Latin America.

Women entrepreneurs around the world are major contributors to the economy, as they are making a difference in the socio-economic arena.

They contribute numerous ideas and a great deal of energy and capital resources to their communities, and generate jobs as well as create additional work for suppliers and other spin-off business linkages.

Nevertheless, a report published in 2016, says 50 per cent of all women-owned MSMEs in developing economies are unserved or underserved by the formal financial sector.

To bridge the funding gap and other issues in Nigeria, Fidelity Bank Plc has changed the narrative by strengthening its lending programme and developing a more robust business case for serving women-owned MSMEs.

To achieve this, the bank has partnered and collaborated with organisations from across the spectrum of the public and private sectors to broadly empower Nigerian women and provide them with the knowledge and tools necessary to start and sustainably grow their own businesses.

A recent $50 million financing agreement signed between African Development Bank and Fidelity Bank Plc would have 30 per cent of the sum ($15m) disbursed to women-owned MSMEs.

Speaking during the signing of the agreement, the deputy managing director of the bank, Mr. Mohammed Balarabe, said the line of credit was designed to boost the bank’s drive in the promoting the growth of small businesses in the economy.

“It’s particularly unique because gender has been brought in, with 30 per cent of this facility targeted at MSMEs that are driven by women. So, that makes it unique,” he said.

Balarabe underscored the importance of MSMEs saying they remain the most active in terms of generating employment and fostering development, a reason behind the bank’s consistent target at the segment.

“That’s why the AfDB has found us fitting to be one of the bank’s that will be benefiting from the facility for onward lending to MSMEs. Fidelity is one of the leading lenders to the segment, but for us, it is not all about lending.

“Our engagement with MSMEs is more. We take time to find their needs and work with them on how to run their businesses,” he added.

The bank’s executive director, Lagos and southwest, Ms. Nneka Onyeali Ikpe, said Fidelity Bank is poised to build the capacity of women entrepreneurs for greater accountability.

So far, she said business dealings with them have shown that they are very detailed in business and show commitment when they collect loans from the bank.

Commenting on the gender-friendly disposition of the Fidelity Bank, the managing director and chief executive officer, Mr. Nnamdi Okonkwo said: “When you get a facility like the $50 million and $30 million is set aside just for women entrepreneurs, it is another step by Fidelity Bank to continue to ensure gender balance.”

He said MSMEs remain the most active in terms of generating employment and fostering development, a reason behind the bank’s consistent target at the segment.

Providing valuable insights into the bank’s unique approach to supporting MSMEs in Nigeria, Okonkwo said the lender had established the Managed SME Division to provide one-on-one advisory access to market for its teeming customers.

“We want to guide aspiring entrepreneurs on how to run successful businesses. Our goal is to build requisite capacity in order to create the Aliko Dangotes’ of tomorrow”, he said.

Underscoring the importance of MSMEs to the growth and development of the Nigerian economy Okonkwo said “they (MSMEs) employ over 80 per cent of the country’s total 90.5 million labour force, contribute 48 percent to Nigeria’s GDP and constitute over 80 per cent of registered exporters in Nigeria.”

The bank is one of the two deposit money banks in the country that disburses the N220 billion Central Bank of Nigeria (CBN) SMEs fund, 60 per cent of which is set aside for women entrepreneurs.

“The Central Bank of Nigeria (CBN) set up a N220 billion fund to support SMEs. And it is pretty simple, why did they do this? They wanted to provide an avenue for SMEs to borrow at 9 percent maximum rate, and it even has a stretched tenure up to 5 years. But, you would also realize that women by culture are excluded from financial access. In view of this, CBN set aside 60 percent of this fund for women entrepreneurs. Those who understand it have taken advantage of this provision. We are currently one of the top two leading Deposit Money Banks (DMBs) in the disbursement of the CBN MSME Development Fund,” said Okonkwo.

At a recent Funding Connect programme tagged ‘Entrepreneurship meets capital’ which brought about 1,500 players in MSME sector to meet and interact with different funders, Okonkwo said the bank had done much for MSMEs and will continue to do more having realised many MSMEs still find it difficult to obtain funds.

He said the bank had partnered with the Bank of Industry (BOI) and Development Bank of Nigeria (DBN) to disburse funds to MSMEs.

“About N6 billion of BOI has been disbursed by Fidelity Bank. Fidelity Bank has also partnered with DBN to the extent the Fidelity has disbursedN9.6 billion of DBN funds. All of these are at single digit interest rate.

“Even the AfDB understands what Fidelity is doing with SMEs in Nigeria and that is why the bank granted us $50 million…for SMEs. This comes with a proviso that 30 per cent of the funds should be for women entrepreneurs.

“Some women entrepreneurs attest that Fidelity Bank has supported them.

“In this industry, some of our colleagues have ‘owned certain segments’. Some concentrate on fashion, some on food and so on but at Fidelity we are inclusive. That is why we concentrate on SME generally. We are not focused on any specific segment because SMEs need that voice that is all inclusive,” Okonkwo stated.

To further encourage MSMEs, the bank recently threw open an entry for grant to MSMEs. A total of 2,500 operators applied. They were taken through rigorous process. This number was scaled down to 50 entries that went through intensive training at PWC experience centre. From the 50 entries, the first winner was given a grant of N2 m and the runner up N1m.

Fidelity Bank believes  that  women play a  crucial  role  in  achieving  sound economic  growth  and  poverty  reduction.  When  empowered,  they  contribute significantly to family income and consequently, poverty reduction.

Recognising that  women  are  often  prevented  from  realising  their  economic  potentials because  of  gender  inequity,  the bank said it is  committed  to  creating  opportunities  for them  in  its  employment  as  well  as  through  lending,  investment  and  advisory activities.

In this regard and in compliance with the Central Bank of Nigeria requirement, Fidelity Bank ensures adequate female representation in its workforce and currently has about 44 per cent of female staff.

Through  the  Fidelity  Managed  SME  Programmes,  the bank  empowers women  entrepreneurs  with  know-how  and  expertise  that  enables  them  build successful businesses.

There is no doubt that with Fidelity Bank, the impact of women entrepreneurs in Nigeria is gaining recognition intensely as the number of female business owners continues to increase steadily and as women entrepreneurs are making positive impact in the global economy.

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