In the last few weeks, we have published some information on some selected banks’ SME credit facilities. We highlighted some key offers including special offers and major distinguishing offers between a bank and others. The banks we examined include Wema Bank, Stanbic IBTC, Diamond Bank etc.
In this last part, we summerise with general perspectives of the banks’ regarding SME financing.
At the beginning of this series, we had noted that most, if not all banks, restrict their loan facilities to existing businesses with some measure of standard bookkeeping practices as well as structured to a significant level. We also noted that the banks will look for cash flow, in other words, the rate of turnover in the business, and many other key parameters for qualifying a business for a loan. In a different series in the near future, we shall be looking at all these parameters in details. It is important to note here that most banks, especially those in our focus in this column, know very well that many small and medium enterprises want to grow and expand.
They also know that dealing with the ever more complex processes and circumstances of the Nigerian business environment is key to business growth. And finally, they are aware that there is a huge gap in the know-how or financial literacy on the part of the small business owners for navigating these complex processes and circumstances.
Therefore it takes a bank that is passionate about helping small businesses grow on all fronts, to give loans to SMEs. For such banks it is beyond financial support, they will go the extra mile in providing SME financing package for working capital and other forms of credit facilities. We shall be back with discussions on these packages with another set of three banks starting in December.