Nigeria

CDC, the UK’s development finance institution, has announced a new investment designed to support high-growth SMEs in Nigeria. CDC has made a US$15 million commitment to CardinalStone Capital Advisors Growth Fund (“CCA”).

CCA is a first-time, Nigeria-focused fund that targets SMEs across six sectors: agriculture, industrials, FMCG, healthcare, education and financial services. CCA will use CDC’s capital to invest in companies which support job creation, as well as import substitution to diversify the Nigerian economy.

The Central Bank of Nigeria on Thursday unveiled the National Financial Inclusion Strategy designed to ensure that at least 80 per cent of Nigerians have access to banking and other financial services.

SME Finance Forum member Diamond Bank’s Head of Emerging Business Ayo Olojede, sits down with CNBC Africa to discuss the challenges SMEs face and how the SME Clinics in Nigeria are providing services to solve these issues.  

The most prominent issue SMEs are facing is access to finance, according to Olojede. There are challenges around interest rates and business registration for SMEs. 

The government has implemented special programs such as the 90 day window for entrepreneurs to register their businesses for a reduced fee of 5,000 Naira.
 

SME Finance Forum member, Diamond Bank released its Q3 financial report, which revealed their disbursement of N1 billion to small business owners under the lending scheme partnership with Women’s World Banking. 

Diamond Bank remains one of the leading retail banks in Nigeria. According to the article, Diamond Bank is among the first five SME customer bank in Nigeria in the KPMG customer service survey 2018.

Key successes of the bank include: 

SME Finance Forum member African Development Bank (AfDB) provided a $50 million credit to Fidelity Bank Plc. to support SMEs, with a minimum of 30 percent of the credit going towards women-owned enterprises in Nigeria.

According to the article, the credit will benefit SMEs in manufacturing, health and education sectors. 

The largest untapped market in the world is women, according to Women’s World Banking. Financial institutions are failing to ensure their offerings work for women, however three elements with a gender-inclusive design can help counter this issue:

A business forum in Lagos, conducted by Centre for Research in Enterprise and Action in Management (CREM) examined the journey of SME funding in Nigeria. Noel Ihebuzor, Phd, Dean of CREM shared the factors inhibiting SMEs from receiving funds to grow. They include: 

During a workshop for SMEs, hosted by the Bankers’ Committee, Central Bank of Nigeria’s (CBN) Senior Manager for the Development Finance Department, Chinedu Zephaniah shared that poor business habits and fragile financial systems have made it complicated to support SMEs. 

“At the moment, we have disbursed N170 billion to support SMEs but the percentage of people that pay back their loan at appropriate time is not encouraging,”

SMEs significant contribution to the growth of the economy in Nigeria is clear, however lending institutions still lack trust.

Industry Partner GBA for Women says that digital solutions for product distribution are rapidly increasing banks’ ability to reach the unbanked – a segment disproportionately made up of women. During the recent All-Stars Academy in South Africa, GBA heard from two of its members who are making huge strides in this area: Diamond Bank of Nigeria - also a SME Finance Forum member - and NMB Bank of Tanzania.

Leading retail bank, Diamond Bank Plc has once again demonstrated its passion for supporting small businesses by rewarding finalists of the seventh season of the Building Entrepreneurs Today (BET) programme with N15million grant.

Ikenna Ubah, Tope Alake, Jumoke Dada, Bayo Ojelabi and Osagie Azeta emerged winners of the grants having displayed exceptional skills and productive business ideas after six months of entrepreneurship training.