A Memorandum of Understanding (MoU) between Fidelity Bank plc and the Small and Medium Enterprises Development Agency (SMEDAN) was signed in an effort to, among other things, give Micro Small and Medium Enterprises (MSMEs) the tools they need to help the nation create jobs and reduce poverty.
The Managing Director/Chief Executive Officer of Fidelity Bank Plc., Mrs. Nneka Onyeali-Ikpe, said the MOU confirms the lender’s status as a SME-friendly bank in her remarks at the SMEDAN collaboration MOU signing event held in Lagos.
Onyeali-Ikpe stated that Fidelity Bank has established numerous structures to support the industry, some of which include the training program through the Fidelity SME Academy, radio program, and the bank’s funding. He was represented by the Executive Director, Lagos and South-West, Fidelity Bank, Dr. Ken Opara.
“We give customised business consulting services in various ways depending on what works best for the target eligible MSME customers/group of MSME customers,” she stated via the SME Academy.
Small business owners frequently believe that finding funding is a major challenge, but according to Onyeali-Ikpe, the bank has discovered that in addition to money, companies also need to establish the proper structures, gain knowledge, and comprehend their industries.
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.
One-on-one business counseling meetings, regular training sessions and seminars on particular business management topics, virtual advisory sessions, among other things, are some of the structures the bank has put in place to support SMEs.
Olawale Fasanya, Director-General/Chief Executive Officer of Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), also spoke and expressed his gratitude to Fidelity Bank for helping to make the partnership possible, saying that as time went on, “we now know where the shoe pinches more in growing businesses.”
He claimed that the MOU has special significance for the ecology of MSMEs as well as the Agency.
In particular, Fasanya said that Fidelity Bank is without a doubt one of the few commercial banks in Nigeria that has demonstrated a great deal of interest in supporting the sizable MSME population.
“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 primary issue that MSMEs have consistently cited as a significant barrier is the lack of access to capital to launch or expand their businesses, according to him.
Fasanya cited the 2020 survey on MSMEs, which was jointly conducted by SMEDAN and the National Bureau of Statistics. The survey revealed that limited access to funds was the biggest challenge, accounting for 27.9% of all challenges, far outpacing others like poor infrastructure and inconsistent policies, among others, in terms of importance.
The study also showed that the majority of MSMEs (59%) largely relied on personal savings to launch and expand their firms.
Fasanya bemoaned the overall pattern that most commercial and even development banks shy away from supporting enterprises contained within the MSME area, despite the fact that banks are intended to lead a financial revolution for businesses, especially the MSMEs.
The Nano and Micro businesses have been the hardest hit, in his opinion. The World Bank estimates that Nigeria’s financing gap for MSMEs to be $158.1 billion. SMEDAN is actively seeking partnerships to close this gap, according to the SMEDAN DG.
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.’
Access to capital for developing markets like Nigeria should be quick and simple.
Digital solutions are accelerating and simplifying credit disbursement, and SMEDAN is eager to collaborate with as many funders as possible.
Fasanya continued by stating that the day was therefore highly noteworthy not only for SMEDAN but also for the entire MSME community as well as other enablers since there is a high anticipation that the narrative would shift quickly, particularly with regard to MSME funding.
“I am confident that the support by Fidelity Bank to MSMEs will allow other funding institutions to follow your trail,” he added.