The introduction of this loan offer
essentially complements the bouquet of product offerings by Stanbic IBTC, as it
aims to be the leading end-to-end financial solutions provider in Nigeria.
The creation of this credit solution is
geared towards encouraging SME growth in an ever-evolving economy. SMEs are the
backbone of most economies, particularly in developing countries. These
enterprises account for many businesses in nations as they are significant
contributors to job creation and economic development.
In Nigeria, SMEs contribute over 48 per
cent to the national gross domestic product (GDP) and account for about 96 per
cent of businesses, which in turn creates about 84 per cent of employment in
the 36 states and the Federal Capital Territory (FCT).
Despite the substantial contribution of
SMEs to the Nigerian economy, challenges still abound that hinder the growth
and development of the sector. These challenges include limited access to
capital and financing, inadequate public infrastructure, and recently, the
COVID -19 pandemic. The pandemic caused several distortions to the economic
framework of the country, causing several startup businesses and SMEs to fold
up.
Furthermore, the Nigerian business terrain
is very challenging. According to a World Bank report, Nigeria ranked 131 out
of 189 countries in the 2020 Ease of Doing Business index. In addition, access
to finance is a key constraint to SME growth.
These challenges have driven Stanbic IBTC
to introduce the SME short term loan facility. The SME loan is aimed at
augmenting working capital to finance various business projects and bridge
urgent cash flow needs.
This initiative enables SMEs to take loans
with ease and convenience. It also offers benefits which include repayment
flexibility and limited documentation with no collateral. The ease of
accessibility to funds is worthy of mention, as this solves one of the key
issues facing small and medium scale businesses in Nigeria which is access to
adequate funding. The temporary overdraft provides financial credits to both
new and existing customers within 24 hours, with a maximum loan repayment
duration of 90 days.
The loan solution offers speedy, robust
funds to prospective customers, including entrepreneurs, who are seeking urgent
funds or temporary overdrafts to cater to their commercial needs.
Stanbic IBTC is positioning itself to
support SMEs to enable aspiring and emerging entrepreneurs in Nigeria sustain
their businesses while also facilitating the development of an enabling
business environment and thriving ecosystem. The organisation has continued to
encourage economic integration by providing incentives for SMEs, which will
hopefully foster a better business environment in Nigeria.
Speaking on the essence of the product to
SMEs, Ayodele Ojosipe, Head, Enterprise Banking, Stanbic IBTC Bank PLC stated
that the product was created for SMEs that require financial assistance for
commercial transactions as well as their day-to-day business transactions. He
said, “One major issue for SMEs is access to funds that aid the growth of their
business and because at Stanbic IBTC, we understand how important funds are to
the success of any business, we came up with this offering to ease the
aftermath of the pandemic”.
With the SME temporary overdraft, SMEs will
not be pressured to remit the loan immediately, as the repayment plan is
flexible and is based on the cash flow of the enterprise. This creates some
form of stability for the enterprises, which will, in time, bolster the
financial sector and improve the Nigerian economy in general.
Another remarkable feature of the SME short
term loan is its convenience. Regular loans usually require cumbersome
documentation, including loan purpose papers and collateral. However, obtaining
this loan requires minimal documentation; making it easy for SMEs to access
funds for necessary costs and other business activities.
The SME loan solution further reaffirms
Stanbic IBTC’s desire to harness the strong entrepreneurial culture of
Nigerians by providing quality financial services to its customers.
This approach by Stanbic IBTC is a breath
of fresh air for small and medium scale enterprises, whose business dynamics
are an important driver of productivity and growth in any economic system.