…target 10,000 beneficiaries
The Small and Medium Enterprises Development Agency of Nigeria, SMEDAN, has forged a partnership with Sterling Bank Plc, to fund 10,000 small businesses with a N5 billion loan portfolio.
Director General of SMEDAN, Mr Charles Odii, said the N5 billion loan which is expected to be ready for access in the next two weeks, will be issued at a single digit interest rate and transparently disbursed.
Odii spoke in Abuja during the signing of a Memorandum of Understanding, MoU, between SMEDAN and Sterling Bank to operationalise the N5 billion facility on Wednesday.
The SMEDAN boss announced that the loan is targeted at reaching about 10,000 small businesses as beneficiaries, even as he decried the lack of access to finance, stating that 90-93 per cent of small businesses do not have access to finance.
“One of the things we are doing at SMEDAN is basically helping to democratize access to finance. If you take a panoramic view, just ask 100 small businesses what their painpoints are; out of 100, I can assure you that 90% to 93% of them would tell you that access to finance is their biggest problem.
“We’ll be signing, shortly, a Memorandum of Understanding; this is basically to create a loan portfolio of N5 billion at a single digit interest rate for small businesses across different sectors,” he said.
Odii added that SEDAN is focused on making access to finance easier to resolve the problem of scarcity of finance ravaging small businesses.
He urged small businesses to access finance anywhere they see it but exercise care.
On his part, the Managing Director of Sterling Bank, Mr Abubakar Suleman, said the bank will deliver the loan, using technology to make it easier for beneficiaries so they do not jump from office to office in search of it.
Suleman added that the Sterling Bank has developed an application called banker entirely for small businesses so that it allows the beneficiaries to access the loan, organise their business records, and help them to pay back the loan.
He said the partnership being proposed will provide access to finance, adding that their job is to guide small businesses through the journey of becoming entities that can attract finance.
He further stated that the requirements for accessing the loans are not complicated, not out of the ordinary, but what a good small business should do such as keeping some records, separating your personal life from business and being very focused on competing.
According to him, the bank and its partner expect that of the 10,000 people that will access the loan, a thousand or two thousand will improve so quickly in their business practice and outgrow the level of funding, so they can start requesting for commercial funding.
“Hopefully of the 10,000 people that will access this loan, we’ll see maybe a thousand maybe two thousand of them will very quickly outgrow this and then request for commercial funding because their business model will improve so quickly that they would realise that the money available to them is no longer enough.
“But also, that their business practices have been improved so well that when they come and ask for N20 million or N50 million they will be able to access it. So, these are the training windows for small businesses to enable them standardise their current business and to reposition them for expansion,” he said.
