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Banks Are Not Helping Us Stay In Business–SME Operators
AT a media briefing held recently in Lagos, to render his scorecard in the last one year of being at the helm of affairs of his organisation, the President, Outdoor Advertisers’ Association of Nigeria (OAAN), Mr Charles Chijide, had argued that members of the association were not getting the necessary support from the nation’s financial institutions.
According to him, running the business of outdoor advertising is becoming increasingly expensive, but unfortunately, financial institutions in the country are not playing their expected role of providing financial back-ups in form of loan facilities.
“We are going digital. Our billboards now cost millions of naira to install. You need to have a very deep pocket to be able to conveniently be in business, because banks are not interested in long term plans, but short term, where they would quickly get their money and returns on investment back,” he lamented.
He urged the nation’s banks to play their statutory financial intermediary role by giving the necessary support to outdoor advertisers and other small scale businesses for the economy to grow.
Interestingly, Chijide’s plight and those of his men, represent what the average Nigerian investor, especially those running the small scale businesses, have to grapple with on a daily basis to be in business.
“It is glaring that businesses are dying daily in the country today because small scale investors are no longer finding an ally in the nation’s banks. It is easier for the proverbial camel to pass through the eye of a needle than for an investor, especially small scale ones, to get loan facilities from the nation’s banks,” pointed out Mr. Anjola Femi, who operates a bakery in Iyana Ipaja.
According to him, though his 15-year-old business is still bringing in the expected returns, he would have loved to expand the frontiers of the business.
“I have what it takes to expand the business; the only thing holding me back is capital. With a Higher National Diploma in Catering and Hotel Management and a 15-year on-the-job experience to back it up, the business would have grown bigger than this if the necessary financial supports had been forthcoming from the banks,” said Femi.
He attributed the bane of the nation’s economy to the fact that the nation’s financial intuitions prefer to give loans to their cronies, rather than growing the economy by giving the needed helping hands to small businesses that could really serve as the engine of growth for any economy.
Perhaps, the Central Bank of Nigeria (CBN) had Femi and his likes in mind when it, in 2006, introduced micro-finance banking, a scheme, designed to take care of those doing businesses at the lower rungs of the economic ladder.
The apex bank had directed all the community banks in the country to give way to the newly-introduced micro-finance banks by taking over the functions hitherto performed by the grassroots financial institutions.
The bank’s former Governor, Prof. Charles Soludo, had argued that the move would enhance service delivery by micro-finance institutions to micro, small and medium enterprises, while serving as a vehicle for rural transformation across the country.
“The new policy will assist in extending the supervisory responsibilities of the CBN to the lower segment of the financial market in Nigeria. Through it, financial services would reach the over 65 per cent Nigerians, presently without any access to banking services,” the former apex bank governor had argued.
Curiously, more than six years after, the targets of the scheme are not being reached.
They are like orphans now. They are at a crossroad. While they cannot access funds from the commercial banks, they are not getting the small scale financial services they are supposed to get from the micro-finance banks.
A banker and Chief Executive Officer of Wealthgate Advisors, Mr. Biyi Adesuyi, believes the situation would continue for some time to come, since those running the affairs of the micro-finance banks are not well-equipped for such task.
“Most of them actually had their backgrounds in commercial banking. They’ve never had any stint with micro finance banking, so how would they perform?” he asked rhetorically.
Until the people skilled in that area are made to run the affairs of those micro finance banks, Adesuyi believes the end to the plight of the nation’s small scale investors is far from being over.