Heritage Bank Unveils Paris Klub SME Scheme
Managing Director of Heritage Bank, Mr. Ifie Sekibo, said there is no better time to support micro, small and medium enterprises (MSME) than now when the survival of the nation’s economy depends largely on it.
Mr. Sekibo highlights the urgency of the sector at the launch of its SME finance package scheme designed to support lending without core collaterals.
The MD noted that to improve the dwindling economy, a robust SME business environment has to be developed.
“This is why we introduced the Paris Klub SME (PKS) Scheme to support lending without core collateral. We take pride in our hybrid solutions where borrowing customers gain access to more value added services including consulting, business tools and technology. What we have done is to bring up an innovative idea of how to finance SMEs without collateral. Once we identify the SMEs, we offer advisory services to them, we help them to structure their businesses and also with their cash flows,” he explained.
The bank chief said the lender is currently developing a sponsored interest scheme for the education sector where educational institutions can borrow at low rate subsidised by the scheme manager. “We are also discussing partnership programmes with Venture Capital Firms to introduce debt-equity financing option”, he revealed.
Sekibo noted that one major reason why banks were not funding SMEs was because of the risk involved. “A high perceived risk of lending to the largely unstructured SME Sector is a major issue. More efforts and resources are generally required to effectively monitor loans to SMEs which may result in eating into the bottom-line. In addition, banks also have different risk appetite,” he said.
Speaking on the new SME Financing Scheme, Group Head, SME, Heritage Banking Company Limited, Mr. Bayo Ogunnusi, noted that Heritage Bank is working on several other sector-specific finance schemes in its quest to make SME financing simple. He specifically mentioned the agric sector where a large chunk of the nation’s SMEs operates.
“We have financed a few agric projects and understand the challenges of the sub-sector. However, as a bank committed to improving national growth and development, we are encouraged by the long term potentials of the sub-sector. We are also leveraging on CBN Agricultural Funds (MSMEDF and CACS) and currently developing capacities to effectively support the agric sub-sector.”
Ogunnusi affirmed that with the ongoing integration of the recently acquired Enterprise Bank with about 160 branches and 400 points of presence, which include ATMs and mini kiosks across Nigeria into the Heritage bank network, the bank’s capacity to grow the retail business sector would be properly enhanced.
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