E-Business
Bridging the ‘Access to Loan Gap’ for Nigerian SMEs
By Adeniyi Ogunfowoke,
One of the biggest challenges that many Small and Medium Scale Enterprises encounter in emerging economies like Nigeria is access to funding and capital. Majority of them either bootstrap or rely heavily on friends and family members for funding. For the latter, it usually leads to disagreement or dispute, especially when parties involved are not on the same page, and this might eventually lead to the liquidation of the business.
Meanwhile, for SMEs that approach banks for the so-called ‘soft loan’, they may not be able to meet the demands and the many paper works required to successfully secure the loan. Banks generally charge between 5-9 per cent interest rate (and more), for 1-5 years short-to-long term business loans. In Nigeria, you can obtain bank loans as small as N50, 000 and as big as N100 million depending on the scope of your business.
If you eventually get the loan, it may arrive too late and you might need collateral. Interestingly, if you survive the aforementioned, you should be ready for the neck-deep monitoring of your bank to ensure that you deploy the loan judiciously.
Despite this, the government and the private sector are making painstaking efforts to support SMEs. The present government’s TraderMoni through the Government Enterprise and Empowerment Programme (GEEP) is helping a lot of small businesses in the country by providing them with as little as N10, 000.
Jumia, Nigeria’s No 1 shopping destination is also at the forefront of supporting SMEs. through the Jumia Lending initiative that gives businesses the opportunity to grow and expand by granting them fast and quick working capital. Some of the advantages of Jumia Lending are easy access to working capital, quick registration process, flexible repayment plan within 1-6 months, low-interest rate, no collateral, no hidden or extra charges and free training and support services to help achieve your business goals.
An important caveat to note to qualify for the loan are (1) You must have been selling on Jumia for at least 6 months, (2) Your 6-months average sales revenue on Jumia must be greater than 100,000.00 and (3) 6-months average items sold on Jumia must be greater than 25 items.
What makes Jumia lending and other digital credit companies quite attractive and the cynosure of SMEs is their flexibility. The paper works are not as taxing as that of the banks and you can get a significant amount between 24 and 48 hours. No bank in Nigeria will grant you a loan within this stipulated period without carrying out exhaustive due diligence.
In fact, some banks have taken a cue from the online quick service loan companies as they now offer non-collateral loans. But, not as quick as the digital credit companies. The indisputable truth is that the new wave of digital credit is good for SMEs.
All communities in Abia State are to be connected to Internet Service within the next 9 months, according to Dr. Alex Otti, state governor.
All communities in Abia State are to be connected to Internet Service within the next 9 months, according to Dr. Alex Otti, state governor.
Otti stated this at the Nnamdi Azikiwe State Secretariat premises at Umuahia, the state capital, while flagging off the first phase of the Umuahia Dedicated Internet Access/Wide Area Network And Managed Network Services Project (Project), saying that it promises to re-engineer efficiency and flexibility in operations and interactions within and amongst institutions, enhance policy execution, and engender a culture of outcome-oriented competition amongst civil servants.
The Project is being handled by iPNX, a major internet service provider.
At the ceremony, Otti, said the project includes distributing high-performance digital tools, laying fibre optic cables in public institutions, and installing infrastructure for high-speed data transmission.
He added that the initiative focuses on improving leadership efficiency, empowering civil servants with digital tools, and enhancing service delivery.
Transitioning to digital platforms would streamline government processes, enable faster communication among Ministries, departments, and Areas (MDAs), and improve engagement with development partners and the global community.
The governor also announced a mandatory digital literacy requirement for civil servants, making proficiency in technology essential for career growth.
Assuring that while the government would provide training, those unwilling to embrace technology risk becoming uncompetitive in the evolving civil service structure.
Plans are underway to expand digital access across Abia, with an agreement already in place to lay fiber optic cables in Aba, Umuahia, and Ohafia.
Otti directed Mr. Gerald Ilukwe, chief information officer to ensure that within nine months, every community in Abia must have reliable network service, enabling businesses to thrive virtually.
The Governor urged the people of Abia to embrace technology as a tool for empowerment rather than a replacement for human roles as the use of technology ought to be on enhancing service delivery and economic development, as well as keeping human decision-making at the core of governance.
The commencement of the initiative marks a major milestone in Abia’s journey towards a fully digital economy.
Ilukwe, described the project as a critical foundation for a digital government, emphasising its role in modernising service delivery.
Ilukwe said Phase I of the initiative prioritises multi-tenant buildings and complexes housing multiple MDAs and assured that MDAs not included in this phase would be covered in subsequent stages.
“Even as we are rounding off this phase, we are already preparing for the next, by the end of this service year, the entire government offices in Umuahia will be interconnected on a single network,” Ilukwe said.
Mr Ejovi Aror, group managing director, ipNX, expressed gratitude to Gov. Alex Otti for the opportunity to be part of the state’s digital transformation journey.
“This partnership signals the beginning of a new chapter in the journey towards building a digitally connected, technologically advanced, and economically empowered Abia State,” Aror said.
Visa, global payment services giant, has announced plans to establish a data centre infrastructure in Nigeria.
Andrew Torre, Visa’s regional president for central and eastern Europe and Vice-President Kashim Shettima
According to a statement by Stanley Nkwocha, senior special assistant to the president on media and communications (office of the vice-president) on Friday, Andrew Torre, Visa’s regional president for central and eastern Europe, the Middle East, and Africa, spoke during a courtesy visit to Vice-President Kashim Shettima at the presidential villa in Abuja.
“This is in addition to its investments of over $1 billion in the country, including a substantial technological partnership with @moniepoint to foster digital payment solutions, a $200 million investment in Interswitch, and a partnership with @thriveagric to empower smallholder farmers and enhance food security in Nigeria,” the statement reads.
During the meeting, Torre said the plan to establish the data centre infrastructure aims to bring new technologies into the Nigerian market that would bolster the nation’s growing digital economy.
“Visa has been making investments and will continue to make these investments in Nigeria,” he said.
Responding, Shettima welcomed Visa’s expansion efforts, assuring the delegation that the partnership between Visa and the Nigerian government would continue to flourish.
The vice-president commended the company for investing in ThriveAgric, noting that President Bola Tinubu’s administration is deeply committed to repositioning the agriculture sector, which remains a top priority in its 8-point agenda.
“Nigeria is where the action is. Of the 10 fintechs in Africa, about eight are in Nigeria, with moniepoint as the newest addition,” Shettima said.
“Agriculture is key to the 8-point agenda of the present administration. President @officialABAT is really keen on repositioning the agriculture industry here, and we have to invest in technology, we have to invest in modernisation.”
On January 23, Moniepoint, a Nigerian fintech company, announced it secured investment from Visa to support the growth of small and medium enterprises (SMEs).
Andrew Torre, Visa’s regional president for central and eastern Europe and Vice-President Kashim Shettima
Federal Capital Territory Administration (FCTA) has approved N242.8m for the procurement of a Microsoft 365 licence for its Internal Revenue Service (FCT-IRS) as part of efforts to digitise the service’s operations.
Mr Michael Ango, acting executive chairman of FCT-IRS, disclosed this after the FCT Executive Committee meeting chaired by Mr Nyesom Wike, the minister of FCTA, in Abuja on Wednesday.
Ango said that the FCTA was making significant investments in technology to enhance revenue generation and collection.
“So, this is also one of those investments in technology that the FCT is undertaking.
“The licence, if procured, will enhance our ability to move most of our manual processes into automated processes.
“It will enhance our ability to communicate within our offices,” he said.
The executive chairman added that the move would also reduce the use of paper and ensure better record-keeping through the storage of information and documents in the cloud.
According to him, “The licence will essentially enhance our operations and assist us in generating revenue for the development of the FCT under Wike’s leadership.”
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