The Head, Emerging Businesses, Access Bank, Mrs. Ayodele Olojede is the
head of Emerging Businesses at Access Bank. In this interview, published first
in Thisday Newspaper, she gives insight into how SMEs can benefit from the bank’s
credit facilities.
What is your bank doing to support the development of MSMEs and make it
easier for them to access loans?
One of the things we are trying to pursue this year is our support for
MSMEs through loans. We don’t pay lip service to our love for MSMEs. To show
the extent of how much we want to support them, we have also invested
significantly in our understanding of the risk variables and factors in that
segment. In the last three years, we have incrementally supported MSMEs. 
In 2018 alone, we granted up to about N37 billion as new loans to 11,000
SME customers which even won us awards both locally and internationally. We
were able to achieve this feat because we introduced an innovative approach to
lending. And with this, all that the customer need to access a loan is just for
them to be able to keep a good credit record and a good sales record. We do not
ask you for an arm and leg. So, if you keep those two records, you are
guaranteed to be able to access our loan. What we do is that we work with the
type of asset that you have, and then we leverage the National collateral
registry. And I make bold to say that, it is only Access Bank in the industry
that is currently using the National Collateral Registry in support of MSMEs.
So, with the innovative method that we introduced, even customers who do
not have a business registered, were able to access loans because what we do is
to work with our partner lawyers to be able to get their businesses registered.
And once that is done, they are able to get a loan from the bank. And from the
number that I highlighted earlier, in terms of volume of loans we have granted
to MSMEs, 30 per cent of that amount was used to support women through our
flagship ‘W’ initiative. In fact, what we have done with the W-Power initiative
is such that, if you own 50 per cent of your business, you can get the loan at
15 per cent per annum.
And then to be able to encourage other women to own businesses that are
not at the stage of 50 per cent shareholding yet. Between 40 and 49 per cent,
we will give you two basic concessions from the regular interest rate that we
charge our customers. Between 30 to 39 years, also, you get one basic point
concession. But anything below that, you will be charged at our regular price.
We are also planning to expand our footprint to health, education, and technology.
For the health sector, for instance, we have a partnership with Medical Credit
Fund, and through that partnership, we are able to grant loan up to N3 million
collateral-free. And for education as well, we give collateral-free loan of up
to N10 million specifically for working capital purposes, such as buying school
uniforms, laboratory equipment, books, etc.
We are also expanding our footprints in the technological sector as
well. Even the recently re-introduced creative sector loan, we are currently at
the forefront of pushing that and we are about the only bank that has even
submitted applications to CBN.
Despite all these intervention, MSMEs still lament the inability to
access loans, why is that so?
One of the factors that we have discovered is the reason for high loan
decline. It’s not necessarily because banks do not want to support MSMEs with
money, but there a lot of other criteria that you have to look at. For
instance, if you want to take money from the bank and you do not have or you
are not able to demonstrate the managerial confidence that is required to
sustainably run that business for a while, you may not likely get that money.
So, the point here is that there are funds that concessionary rate is as low as
nine per cent and we are even saying we are going to be flexible with our
collateral requirement. But then you still find that some customers would still
not be able to access finance from in banks because of some certain things that
are required on their own part. And one of such is the need for you to be able
to keep your records like I earlier pointed out. That is because we would be
asking for those when we are not emphasising or overly demanding of collateral.
Your bank used to be keen on capacity building for MSMEs, is that
something you still do?
At Access Bank, we believe that it is one of the areas where MSMEs
require supports and we have various workshops. Our team just came back from
Jos where we had a workshop on how to be able to leverage social media
platforms to boost sales. It is very important that the MSMEs are able to sell
the products that they produce so that they can pay back the loans. So what we
aimed at doing was to give them an expository training on digital platforms as
different from the traditional methods of selling. So, we are trying to expose
them to all of those platforms to help them to be able to sell beyond the
proximity of their location.
Another thing that we also do very well to be able to help our customers
is that we organise MSME clinics. And these are one on one engagement.
Typically, what happens is that the consultant would ask key questions around
areas where you are struggling, and then they would be able to proffer solution
to help you through them. We have been doing this now for many years. Last
year, we were able to successfully engage 11,000 customers. So far, by this
half year already, we have done about 12,000 from our 30,000 target for this
year. With this, we are helping them with their finances, business management
practices, helping them with understanding alternative methods of how to be
able to sell their businesses and also supporting them with loans.
You said you granted over N37 billion in loans to SMEs, how much did you
grant the previous years?
The years before, it was about N22 billion to 8,000 customers.
How long is a customer supposed to have a relationship with Access Bank
before benefiting from its loans?
The way we think about MSMEs has typically gone beyond the traditional
ways banks used to look at them and engage with them. When I talked about
keeping records, I didn’t mean keeping records with the bank. What I meant was
that, if you are a business owner, do you have your sales records? When you buy
your stocks, do you keep records of what you bought and how you are selling
them? So when I come and ask you, how much have you sold today, you not only
able to tell me, you are also able to show me. And then i can see what you have
done for the past three or six months. That is discipline. Now, if the bank
wants to lend money to Cadbury for instance, the first thing they are going to
ask of is their financial statement.
So what I am saying is that, where is your own financial statement as a
business owner? Possibly, what we would be seeking to see from the bank is that
you are also depositing your sales proceeds to that bank. Hence, we can give
you a loan even when you are not our customer. What we only require is that you
keep the money in a bank. And what we are trying to ensure by so doing is that
you participate in the formalised sector. So if you wanted a loan from us
today, without having an account with us, we can give that to you provided, you
were able to present your business records and bank statements and you still
can get a loan. But of course, you would still have to open an account with us
where the money would be credited into.
Earlier you said your bank is expanding its scope to support education,
health and IT, why not agriculture, and what sort of financing is available to
MSME players in those sectors?
We have a dedicated team that handles every agricultural transaction,
they don’t sit with my team and that was why I didn’t talk about it. But as a
bank, agriculture is one of the sectors we are also focused upon. Generally,
all our solutions are tailored through what a client would require. So if it
were an equipment purchase, you want to expand your business, etc, we would be
able to support you in that line, and they are all collateral-free. My emphasis
is more on those facilities we give out collateral-free. Because collateral is
a major challenge in accessing finance to a lot of MSMEs. So, we have been
trying to be creative around how we work with them.
So if you asking for facility of about N50 million or N100 million, then
it is a different type of assessment that we would be requiring. We a biased
about women, so our flexibility for women in terms of a collateral-free
facility is up to N4 million. Generally, it is about N3 million. Remember I
mentioned our partnership with Medical Credit Funds, in the health sector, and
that enables us to be able to give collateral-free loans to up to about N3
million. But under that program, we can actually lend up to N350 million. This
thing about gender is all about empowering women to be able to do more in
business.
You mentioned earlier that you are the only bank using the collateral
registry, why do you think other banks don’t trust the collateral registry
enough to leverage on it in giving loans. What has been your experience in
leveraging on it, and what its opportunities for us as a country?
I think it starts with what your focus is as a bank. So if you are not
focused on MSMEs as a sector, you are not necessarily required to use the
National Collateral Registry, because there is a different registry for every
other type of loans. So, at Access Bank, because we are deliberate about our
support for MSMEs we are also leveraging all of the infrastructure that have
been provided.
And so, the National collateral registry just allows us to be able to
register moveable assets. And the way the register works, we have some unique
identifiers that, if you go to another bank, they are supposed to be able to
know that you have pledged those assets. So that is supposed to protect us. So
as an organisation, if you are not focused on this particular segment, then you
may not have a need for the registry. And that is why I said what I said
because a lot of banks would claim to be playing in that segment, but then, can
they boast of some of the achievements that we have, and can they do it the way
we do it at Access Bank? Not necessarily.
