Fidelity Bank Plc and Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) have signed a Memorandum of Understanding (MoU) to bridge $158.1billion Small and Medium Enterprises financing gap in Nigeria.
According to the World Bank, Nigeria’s financing gap for MSMEs is estimated at $158.1billion.
The MoU, according to both parties is meant to help small businesses access much-needed capital and capacity development initiatives
The Managing Director/Chief Executive Officer, Fidelity Bank, Nneka Onyeali-Ikpe who was represented by the bank’s Executive Director, Lagos and South-West, Dr. Ken Opara, at the MoU signing ceremony in Lagos, said the partnership with SMEDAN reinforces the fact that the bank is a leading supporter of SMEs in Nigeria.
According to him, “As a commercial bank, it reinforces the fact that Fidelity bank is an essentially friendly back. We’ve created a lot of structures to support SMEs and we have a capacity training program for SMEs, a funding scheme, and access to the market. And again, collaboration is very important and so we are signing a MoU with SMEDAN to take SMEs to the next level.”
He noted that the bank sees a lot of value in collaborating with SMEDAN, stressing that, “most of the time, small business owners think that their problem is mostly financing. But we’ve discovered that they need to put the right structure, knowledge and they need to understand their businesses. And so we signed the MoU to build up capacity for SMEs and collaboration in some other key areas, they need to help them eliminate the areas that they have been having issues.”
Also speaking at the MoU, Director-General/Chief Executive Officer, SMEDAN, Olawale Fasanya stated that the agency is seeking partnerships with financial institutions to close the $158.1billion financing gap needed in the MSMEs sector.
According to him, “While banks are supposed to spearhead a funding revolution for businesses especially the MSMEs, the general trend is that most commercial banks and even development banks shy away from funding enterprises captured within the MSME space.
“Nevertheless, we are aware that some few banks have come up with innovative solutions to provide tailored financing windows to viable enterprises within the MSME space. Our findings have, however, revealed that Fidelity bank loan portfolio to MSMEs is one of the biggest from the commercial banks.
“The Agency is aware of the risk component, hence, our proposal/offer to provide BDS to some of the MSMEs that have benefitted from your products across the country. For emerging markets such as ours, access to capital should be fast and seamless.
“Digital tools are improving the speed and ease with which credit can be disbursed and SMEDAN is willing to partner with as many funders as possible. I am confident that the support by Fidelity to MSMEs will allow other funding institutions to follow your trail.”