To ensure greater economic growth, expansion and sustainability, FirstBank of Nigeria Limited and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) have signed a Memorandum of Understanding (MoU) to boost and deepen the impact of small and medium businesses in the country.
Speaking during the signing ceremony at the bank’s corporate headquarters in Marina, Lagos, yesterday, the management of the bank, represented by the Executive Director and Chief Risk Officer (CRO), Olusegun Alebiosu, who spoke in company of several top management staff of the financial institution, said government at all levels should prioritise capacity to galvanize SMEs for economic development.
Alebiosu, who stressed the need for improvement in the country’s power sector, maintained that a tough operating environment, financing, unstable interest rates and loan default on the part of small and medium enterprises have been major constraints to profitability and sustainability of SMEs in the country.
“In as much as funding and capital remain critical to the success of small businesses, trust, integrity and discipline are also very important, because if operators of SMEs continue to default in repaying their loans, it becomes a significant challenge for the banks to continue to support them in a reasonable way.
“But with our resolve to support SMEs as key components of jobs creation and a robust, thriving economy, we assure SMEDAN that we will not relent in lending support to that critical sector of the nation’s economy,” he said.
FirstBank will partner with SMEDAN to strengthen SMEs and further expand the Nigerian economy as we recognise their impact being the engine of any economy. FirstBank is woven into the fabric of society and the impact of SMEs remains very important to us.
Speaking further, he said: “At FirstBank, we understand the critical roles SMEs play in the growth of a nation’s Gross Domestic Product (GDP) through diversification of the economy, job creation, wealth distribution and social stability. This is one of the driving forces behind our SME Connect initiative through which we offer bespoke financing and non-financing solutions to meet the needs of our growing SME community.
“For instance, in 2022, FirstBank disbursed about N455billion in value through tailor-made loan products to support SMEs in various industry segments and we have also continued to deploy various innovative e-payment products and services to aid SMEs’ trade and collections and in the process, create a seamless experience of doing business.”
He maintained that the SMEs community will be exposed to training, workshops, mentorship programmes, financial and non-financial interventions needed for boosting their businesses through the entire value chain, adding: Indeed, the opportunities are endless!
“With the Bank’s presence in Africa, Europe and Asia, our international subsidiaries have continued to foster international trade relationships and partnerships which have won us much global acclaim. These and many more are the endless opportunities open to all participating SMEs through this partnership.”
Also speaking, the Director-General of SMEDAN, Olawale Fasanya, who was joined by some principal officers of the agency, including Kole Daudu, Moshood Lawal and the head of the Lagos office, pointed out that as an agency of government charged with ensuring the success of small and medium businesses in Nigeria, it would continue to advocate for a viable SMEs sector while stressing the need for small business owners to realize that there is no free money or funds anywhere in the world.
Insisting that finance and funding remain critical issues for startups and even businesses that have established their presence in the sector, he said the MoU with FirstBank and other banks will be channelled towards funding credible SMEs, which will be key to growing the local economy.
“We are also talking to the government to see the need for a Credit Guarantee Scheme (CGS) and Business Development Support Services since loans have been a major challenge to the survival of small businesses in the country.
“There is also the need for the establishment of common facilities for SMEs in the same value chain whether in manufacturing, agriculture, textile or fashion for young startups, among others from production to the market. In that regard, the Ikorodu Industrial Area for packaging, as well as the Katsina, Oshogbo are on stream from the point of production up to when their products get to the market,” he stated.
Fasanya also explained that SMEDAN is pursuing a Conditional Grant Scheme for private businesses to thrive in the country, adding that the MoU would have been signed before now, but since the agreement has been signed, the agency will ensure that it did not disappoint in advancing collaborations on SMEs in the country.
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