Ime Akpan
Small and Medium-sized Enterprises (SMEs) are regarded as the engine of many successful economies, holding immense potential for generating employment opportunities, development of indigenous technology, diversification of the economic and forward-integration with established sectors such as banking, telecommunication, oil and gas among others.
They are seen as important economic catalyst in developing and industrialised countries with 80 per cent of industrial work force in Japan employed by SMEs, 50 per cent in Germany and 46 per cent in the United States.
That the Nigerian government is turning to small and medium scale industries and entrepreneurs as a means of developing the economy and solving problems is further proved by the fact that a greater percentage of all registered companies in the country are constituted by small scale industries.
While striving to remain in business, access to finance is a critical success factor in the growth and development of SMEs and quite a number of them suffer infant mortality.
This challenge could be addressed by banks. And one bank that has risen to the occasion is Fidelity Bank Plc, a full-fledged commercial bank with over four million customers and with asset base of N1.6 trillion as at October 2018.
And to give walk to the talk, the bank has lined up some products for SMEs to overcome financial difficulties.
Financing SMEs the Fidelity Bank way
Realising that SMEs are the engine room of any economy, Fidelity Bank Plc, with over 3.8 million customers who are serviced across its 240 offices and various digital banking channels, has, through a multifaceted approach, created amazing SME products and SMEs Banking Division to provide solutions to the SMEs operators.
These include, but not limited to Fidelity Managed SMEs Business, Fidelity Small Business Account (FSBA), Fidelity Pharmacy Support Facility, Commercial Support Short Term Loan and Fidelity Managed SMEs Business.
The Fidelity Managed SMEs Business is meant to address the challenges affecting small businesses in the country. The initiative tackles the high mortality ratio experienced by SMEs in the country and helps to guide small businesses in their efforts to penetrate the market by providing advisory support and enhanced capacity building programmes that would aid the survival of their businesses.
The Fidelity Small Business Account (FSBA) which is designed for individuals and corporates to get the support required to take their businesses to the zenith
The Fidelity Pharmacy Support Facility helps eligible pharmacists to meet working capital needs by helping them purchase stock.
Currently, the bank runs a radio programme on Inspiration FM, Lagos, to educate, inform, advise and inspire Nigerian entrepreneurs with knowledge and expertise that will enable them build sustainable and successful businesses.
The interactive radio programme has played host to many business owners to share their insight and unique success stories.
The bank has gone a step further to create a Managed SME Division within the bank structure to cater for SMEs by giving them a one-on-one advisory touch, accessing markets for their customers, and guiding aspiring entrepreneurs that do not have enough knowledge to run their businesses.
“Interestingly, a lot of people are of the view that banking SMEs is a risky business. Of course, banks are in business to take risks, but we have taken a different approach to supporting SMEs. We set up the Managed SME Division to provide one-on-one advisory, access to market for our customers, and to guide aspiring entrepreneurs that are just clueless about how to run a business. Our goal is to build requisite capacity in order to create the Aliko Dangotes’ of tomorrow.
“We do not want to bank SMEs haphazardly, and we therefore created a Managed-SME division. That division focuses on providing solution to challenges faced by SMEs through a multi-faceted approach.
“This is an inspiration for everybody to know that you can start small and become a Dangote of your own in the future. We have a major component in our managed SME unit that helps entrepreneurs with business management skills. A lot of people may have capital and other things required to start a business, but they don’t know how to go about it. So, we created this unit to provide support services, complemented by a host of other resources that we provide,” said the managing director and chief executive officer of the bank, Mr. Nnamdi Okonkwo.
And the bank has a unique way of approaching the SMEs funding. It adopts what Okonkwo calls “structured approach.”
“We approach this from a structured perspective. That is why we have a general manager, heading the SMEs division. What we do is clusters, businesses that look alike. And their needs are similar. You pre-qualify them. Study what they do. And then you create financing products for them.
“If you take some examples, we have done successfully. In Aba, we have Aba shoes and leather clusters. In Abeokuta, there is Adire cluster. In Kano, there is tannery cluster. We study their peculiarities; we do the risks and mitigate; we do the analysis properly. And say, look all these people, if you do to say ASPAMDA, and you take the cluster of people that sells break fluids, you find out that their needs and risks are similar. Then, you create a product that helps them.
“Now as a bank, our loan portfolio to SMEs is about N60 billion that we have given as loans to SMEs. In terms of the customers’ count, for three million customer count, we have SMEs probably account for about 40 per cent. So we are definitely SME-supporting bank,” said Okonkwo in an interview.
So far, the bank has disbursed over N3 billion to small businesses from the N220 billion CBN SME fund being expended by participating DMBs.
“When you see the advert that says ‘Supporting 500,000 SMEs in a year’ it is a tough job, but somebody has to do it.’ That somebody is Fidelity. Between now and when we did the advert, SMEs customer numbers have grown to about 600,000. How do you measure this? It is by the number of accounts, by the size of deposits. We currently have about N120 billion in SME deposits since we started focusing on SMEs. And in terms of loans, we have extended loans of N60 billion to the SMEs segment,” said Okonkwo.
He said support for SMEs is a religion in the bank adding that any chief executive who does not believe in SMEs does so at their own peril.
“We have a huge number of SMEs in Nigeria; in any economy actually you cannot ignore the role played by SMEs. In Nigeria and elsewhere, the mortality rate of SMEs is quite high and as a bank we decided to dedicate significant resources and our time to develop and support SMEs
“If I have become the chief executive officer and as the third chief executive officer of the bank, if I had come in and I have a different mind-set, then I would probably have jettisoned SMEs, but that is not the case. By the time my tenure is up and I leave Fidelity, we would have built the kind of institution that whoever succeeds me will also continue with what we are doing and taking it to a higher level. And this is very important.
Up to the board level, we are passionate about SMEs. So if for instance Fidelity is interviewing to hire a new chief executive officer and he or she doesn’t believe in SMEs, the chances are that he or she will not get that job. That is how serious Fidelity takes corporate strategic focus and Corporate Governance because our mission says that we want to make financial service easy and accessible to our customers,” he said.
Partnerships
To further grow SMEs, Fidelity Bank has partnered with international funding agencies to provide N500 million funding for SMEs in the country.
Consequently, it organised the ‘Fidelity Bank SME Funding Fair’ aimed at providing funding for SMEs to strengthen economic growth and development.
It also partnered with Africa’s Young Entrepreneurs (AYE) to boost SMEs and to empower young entrepreneurs in the country.
The partnership will give the bank the opportunity to offer financial and technical advisory services to enhance the competitiveness and dynamism of young Nigerian entrepreneurs and also strengthen the ongoing efforts and initiatives of AYE in developing and supporting future business leaders.
AYE, with a network of over 12.6 million members across the continent and 1.6 million Nigerian members makes it the largest network of entrepreneurs in the world.
It is an organisation that exploits workshops, conferences and motivational talks to share practical information on how to develop and manage business
“As a bank, we are committed to growing the economy and in pursuit of this we are constantly searching for critical partners that are closely aligned to our strategic objectives. AYE is one of those partners,” said Okonkwo.
Awards
In recognition of its commitment to drive economic growth by helping government to reduce its dependence on oil income, Fidelity Bank, with over 240 business offices and various digital banking channels has scooped many awards including: *Best Bank in Corporate Social Responsibility at the Nigerian Eminent Personalities and Corporates (NEPAC) Awards, 2018; *Most Innovative E-Banking Platform of the Year at the Finance Mobile Entertainment Summit and Awards, 2018; *SME Friendly Bank of the Year at the Lagos Chamber of Commerce & Industry (LCCI) Awards, 2017; *Outstanding Television Commercial Award, 2017; *Most Improved in Corporate/Investment Banking’ and ‘Best Bank in Mobile Money Services’ at BusinessDay Banking Awards, 2017; *SME Support Bank of the Year at the Independent Man of the Year Award ceremony, Lagos, 2016; Bank of the Year at 17th Global Banking Awards, Ghana, 2016; *Deutsche Bank United States Dollar Straight Through Payment Award, 2013; *Best Socially Responsible Bank in Africa at African Banker Awards, orgarnised by the African Banker Magazine in Washington DC, USA, 2008.
