Despite high risk, SME remains the nerve of the Nigerian economy

As the loan services market start to sparkle, innovative strategies aimed at mitigating the high risk posed by small business are created. Ochonogor Chukwuma, executive director of Rosabon Financial Services Limited, speaks to FRANK ELEANYA on the new products and strategies the company is providing the SME sector to make their operations seamless.

 

Tell us about Rosabon financial services.

Rosabon financial services is a financial solution to organisations where we bring financial innovative products to our target market, and these include corporate organisations, small and medium term enterprise, and mass market working class organisations.

We are duly registered and regulated by the Central Bank of Nigeria (CBN) and we are in our 24th year, giving financial solutions to big organisations who began operating finances, for SMEs. We also provide finances in terms of working capital finances and contract finance, and for our working employees, we give urgency personnel loans and businesses.

 

You mentioned in your mission statement that your success is attributed to emphasis on customer satisfaction. What unique experiences do you offer your customers?

Rosabon financial services is all about excellence and we try to show this to our stakeholders and our customers, by giving them efficient service, responsiveness, courteousness, special treatment and relationship.

What is your assessment of the loan services market in Nigeria? Do you think we are heading in the right direction?

The loan credit market in Nigeria has been growing in leaps and bounds. In fact, larger institutions are participating more. But there is more to do particularly in the SME finance, the big large corporate market has been taken care of, but in medium to large, to an extent, there is progress.

Companies are now leveraging technology to make services faster, easier and richer. Is that the case with Rosabon?

Yes. If not, we would not be taking ourselves to the next level or be in competition with bigger companies. We have an in-depth technology and software unit, which looks at processes to enable our client services and our communication with our partners and clients. Recently, we have taken up an upgrade of our technology services and capacity, which would take several months and would take us to the next level in terms of optimizing customer experience and services.

 

Which of your product easily reckons with the market and why?

All our products have market acceptance because we go into places that require it, and we are in the business of continuously improving our product and services. We are always in recognition of customers’ needs. We have several packages and the one that has a lot of market acceptance is the operating business we give to corporate organisations, particularly the one related to vehicle and transport needs. We give prices that our competition cannot match.

We understand that Rosabon is on the verge of releasing a new product. Can you tell us what it is about?

Yes, this is a variation of operating needs for the retail and SME segment. The product that is currently in the market is one of a finance phase, which is the full cost of the asset plus the interest payment over a period of time. In the operative lease for corporate organisations, the intention is for the lessee to own the property. However, in the target market like the employees of this organisation and those in the SME space; they do not have the resources to claim capital allowance. The effect of being able to claim capital allowance is that the price becomes less in the lease. We have introduced this innovative product to people who want to purchase vehicles at a ridiculously low rate as compared to 25 percent of what it would normally be.

Does Rosabon carry out CSR projects? If yes what are these projects and how do they resonate with the community?

It is an organisation that has societal outlook because we recognise that for us to thrive, our wider society must thrive also. We have been undergoing a number of Corporate Social Responsibility (CSR) projects every year. But we have just completed our 23rd and we are centering on women empowerment and promoting indigenous production with women entrepreneurs.

We gave soft loans to 23 women from various communities and States; this was done in conjunction with an NGO that focuses on skill acquisition. We also had public school training and we have some products in the educational field where we would be giving out scholarships to people who participate in the scheme every term and also in the medical field.

We would be sourcing for opportunities to finance clinical and hospitals’ equipment to enhance the growth of the society.

Some CEOs say small businesses are high risk, is the view true with Rosabon and how do you mitigate high risk?

We know that SMEs play a major role in our economy. They contribute about 45 percent in employment and 23 percent to national GDP. That is their overall importance. At the same time, it is natural for it to be risky; I must add that Rosabon had won several awards in this respect.

SMEs are more susceptible to any shock or mistake but this is not a phenomenon that is exclusive to Nigeria. It is worldwide and it arises from limited financial resources. In terms of Rosabon, we try to understand our partners and give financial advice to how they can grow their business.

 

Nigeria is in recession and businesses are adversely exposed to it. In your view, what steps do we need to take to come out of it?

The recession is a combination of the past and the present- meaning during the period of boom the right things were not done to prepare for this time – for instance, bloated public service, corruption and our reliance on oil. In the present, we have seen minimal private sector initiatives because no one would take the public stimulus of this current administration to be effective as there has been no significant movement in the private sector.

How is Rosabon positioning for the market in the next five years?

We are having foresight for the future and we have business innovation departments that look at new market development, how to improve by listening to customers feedback and providing solutions. We are all about continuous improvement, product development wise, customer experience wise, internal operation wise- all around each phase of the organisation and we believe it would help us become better.