Bank unveils N8bn financing at BusinessDay SME forum
Keystone Bank plc has informed operators of small and medium enterprises (SMEs) during the BusinessDay Annual SME forum that it has N8billion SME funds which operators can access if they put the right structure in place.
This was stated by Yvonne Isichei, executive director, Keystone Bank plc and Obiageli Ibennah, head, products and marketing support division of the bank during this BusinessDay forum for SMEs which held weekend in Lagos with theme: ‘Identifying, Understanding and Managing Risks in SMEs.’
Isichei also stated that the bank had already done up to N1.5bn lending to SMEs and provided quite a number of support services to the sub-sector to boost the businesses of its customers.
She further stated, “We are happy to have BusinessDay as a partner in progress, we intend to keep this partnership alive to ensure that SME businesses thrive in a sustainable manner. She added that Keystone Bank is a market with three markets – Lagos and the West, Abuja and the north and the south and that the bank’s goal is to up what it has done in terms of SME financing, working with its various partners.
To the SMEs, Isichei said, “If your risks matters are not dealt with, you will not be sustainable.” She then explained that the bank was working with partner agencies to build capacity around the SMEs, make them strong to handle risks and to get them ready to access finance. “Keystone Bank is ready to engage with you and support you in growing your business,” she told the SME operators.
Frank Aigbogun, BusinessDay publisher, explained that this year BusinessDay chose to focus on the theme: “Identifying, understanding and managing risks in SMEs because of its belief that whether the business is small or large, they all have to contend with risks, sometimes on a day-to-day basis.”
Also, seasoned entrepreneurs such as Joachim, CEO, Conrad Clark Nigeria; Oguche Agudah, special adviser to the minister of trade and finance; Olubunmi Adefisayo, research assistant, LEAP Africa; Friday Okpara, representative of the director-general, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and others all shared practical insights on how SMEs could manage risks.
Taking quotes from Warren Buffet, Joachim Adenusi, a passionate inspirational risk management professional with 23 years work experience across different sectors said, “On earnings, never depend on a single income, make investments to create a second source.
“On spending, if you buy things you do not need, soon you will sell things you need; on savings, do not save what is left after spending, but spend what is left after saving; on taking risks, never test the depth of river with both feet; on investment, do not put all your eggs in one basket; on expectation, honesty is very expensive gift, do not expect it from cheap people.
Adenusi described a risk as effect of uncertainties on a business’ goals or objectives. To manage a business successfully, he says an entrepreneur must possess at least four of the following – passion, research, marketing, management, people, process and sales.
According to him, the steps involved in risks management are: step one – knowledge of strategic objectives (priorities); step two – identifying, assessing and evaluating risks; step three – compiling a risk list/register; step four – suggesting risk treatment actions; step five – implementing action plans; step six – monitoring and reporting risk treatments; and step seven – reviewing the above risk management process.
Using waste management collection and disposal business as an example, Adenusi said a flow chart can be developed for each business to identify the risk. In this example, the flow chart involves one – driver and crew arrives at depot; two- driver and crew depart depot; three- driver and crew arrives at pick up location; four- crew collects waste and deposits into back of vehicle; and five- deposit waste in transfer station.
In identifying things that pose risks, he said the keys of the vehicle may not be found, because no key control was in place, so someone may have misplaced the truck key or left it at home.
As little as this problem may appear, he explained that it could cause delay in start of operation for the day such that all the all the rounds may not be made that day, leading to customer complaints and the solution would be to purchase a secure cabinet to keep the key and establish a key control.
But for risks that are beyond the control of the waste collection firm such as heavy traffic, he said the manager could decide to ensure the rounds are done at periods where there was no likelihood of traffic such as collecting wastes at night if the location is a market and residential areas that are not gated.
For some entrepreneurs that may need the services of a chief risk officer and could not afford one, Adenusi suggested they could rent one.
Oguche Aguda, another speaker, in addressing issues of SME funding, urged entrepreneurs not to simply get angry with the financial institutions but understand them in order to know how to access financing from them.
He explained, “Banks are driven and motivated by profits, not necessarily to offer ‘assistance’ and they are constrained by fear of losing money as the money they are lending is not theirs.
He stated, “As a potential borrower, put yourself in the banks’ depositors shoes. Banks need to adhere to regulatory standards, their profitability is regularly tracked by investors- they need to make explanations for increased loan losses to investors and they have to work within a strategic framework. This drives their marketing and lending activities.”
So he urged entrepreneurs: “When approaching financial institutions, approach it like an exam! They don’t trust that you’ll pay back so give them no reason to ‘fail’ you! Some banks are making efforts to also understand SMEs by offering things like business advisory, business support and shared services.
“Understand their language, understand your business, understand your industry, maintain a good credit record with your bank and suppliers, ensure your business is structured, have a plan, have some sort of accounting system, your business foundation is most important.
“To limit risks, before seeking funds from financial,” institutions, Aguda advised, “Start small, test your model, generate sales, get partners, focus on barter arrangements, explore temporary staff, live or die by innovation, choose your bank wisely, start with a checking account, let all your sales proceed pass through the account, have some form of accounting system in place and so on.”
There was also a panelist discussion by some of the speakers, questions and answers session, interactive session and networking. This annual BusinessDay forum which has been holding for some years now in Lagos will also be taken to other regions of Nigeria in partnership with SMEDAN and other strategic partners.
OLUYINKA ALAWODE