Fidelity Bank Plc has announced plans to connect Small and Medium Enterprises (SMEs), to affordable and long tenor funds courtesy of its SME Connect Fair, scheduled to hold in three commercial nerve states – Lagos, Kano, and Rivers.
Indeed, the bank said the move became imperative considering the fact that funding SMEs through commercial sources is very expensive and uncompetitive for SMEs. The Managing Director, Fidelity Bank, Nnamdi Okonkwo, represented by the Executive Director, Lagos and South West, Nneka Onyeali-Ikpe, at a news conference to herald the SME Funding Connect, scheduled to hold on the 7th of August, kick-starting from Lagos, said SMEs are the engine for any economy that is growing. He said statistics from the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), revealed that about 40 million SMEs are registered, contributing 80 per cent of the workforce in Nigeria.
“This shows that it is a sector we cannot ignore. We also know that funding is still one of the major challenges for SME growth. There are other bottlenecks such poor infrastructural facilities, and multiple taxes. We are trying to solve the ones we have the capacity because SMEs are our strategic partners,” he said. Meanwhile, the Divisional Head, Managed SMEs, Fidelity Bank, Osaigbovo Omorogbe, said the lender has disbursed about N2.3 billion under the Central Bank of Nigeria’s (CBN’s) N220 billion Micro Small and Medium Enterprises (MSME) Fund, and another N9 billion from the N28 billion line of credit it is managing on behalf of the Development Bank of Nigeria (DBN). “We have another N9 billion in the pipeline to be disbursed soon,” he added.
Omorogbe further noted that, “We have been funding the subsector, but through commercial funding, which is very expensive. This is why we are bringing this fair together to give SMEs access to venture capitals, and angel investors where they can get access to longer and stable funds. We are trying to solve their funding needs. The fair is going to bring in venture capital firms, private equity firms both within and outside the country. “The event will kick start from Lagos and the train will move to Abuja, Port Harcourt and Kano. We anticipate that at the end of the fair, SMEs would have gotten access to funding from both local and foreign funders,” he added. He said there are many issues around funding, but said the problem is not so much of the funds not being available, but whether if the SMEs have positioned their businesses to become attractive to people who are ready to fund the sector. “In fact, we have captioned this fair as a meeting of funders and founders. Founders being the business promoters and funders who would be supporting SMEs” he said.