Bridging SMEs Financing Gap: Tackle Identity Problem – Heritage Bank Boss

The Managing Director/CEO, Heritage Bank Limited, Ifie Sekibo, has asked the Nigerian government to resolve identity management challenges in the system to facilitate commercial lending to Small and Medium Enterprises (SMEs) in the country.

Speaking at the Finance Correspondents Association of Nigeria (FICAN)’s 30th-anniversary conference and awards with the theme: “Financing infrastructure & SMEs for inclusive growth in the post-COVID-19 economy”, which was held in Lagos recently, Sekibo noted that until the country developed an identity management system that delivers value to the citizenry, SMEs will continue to grapple with financing challenges.

The Heritage Bank boss, who was represented by the Divisional Head, Strategy and Business Solutions Olusegun Akanji, said although the banking industry has financed many SMEs, it has accumulated the largest number of bad loans and frauds.

“The government needs to also put in place enabling policies that will support the private sector to complement its efforts at bridging the country’s infrastructure deficit. Government alone cannot solve the country’s infrastructure challenges, it is the private sector that will deliver the solution, we need global private sector intervention to help us achieve a vision of infrastructural development,” Sekibo noted.

For her part, the Managing Director/CEO, Fidelity Bank Plc, Nneka Onyeali-Ikpe, who was represented by the Divisional Head, SME Banking, Osaigbovo Omorogbe, said even though banks are willing to support SMEs, many of them lack the capacity.

“Commercial banks are not running away from supporting SMEs but joining hands with the government and other stakeholders to refinance all of what you see around infrastructure which is critical to the economy. I think the questions that should be answered for every proposal are, ‘Is it bankable?  If you are going into this, what structure should be in place to ensure that the funds we are going to put in will be recovered back because we have stakeholders and investors who are also looking towards a good result?,” she queried.

For the former Acting Managing Director, Bank of Industry (BOI), Dr. Waheed Olagunju, the government and the private sector have greater roles to play in boosting the capacity of the SMEs sector.

“We need to build the capacity of our people; the government and the organised private sector have a role to play. There must be a way of helping the SMEs as the engine of growth in the economy. I believe that the government and private sector development partnership will help. We need to work on the ecosystem looking at what other countries have done: they invested in industrial parks and technology as a short-term measure”. He said

He noted that the world is awash with investable funds of more than $17 trillion, stressing that Nigeria as one of the best investment environments in the world can take advantage of such funds.

“Investors are looking for where to invest and return-on-investment in Nigeria, prior to COVID-19, was one of the highest in the world. According to UN statistics, Nigeria was ranked between 21 and 35 per cent on Return-on-Investment, Nigeria has the highest foreign direct investment in Africa. The world wants to do business with Nigeria,” he said.

Also speaking at the forum, the Managing Director of FMDQ Group, Bola Koko, represented by Yomi Osinubi, identified the energy sector as the central focus where SMEs can get the best benefits of infrastructure development in the country.

Comment here