‎Sage-Grey Finance Limited plans to raise fresh capital through a stock exchange listing before converting to a commercial banking licence as it moves to expand its financing activities.
‎
‎Speaking at a press conference to mark its 10th anniversary, its Managing Director, Temitope Runsewe, said the listing would provide access to capital in Nigeria, while the banking licence would enable it to offer more services and reduce its cost of capital.
‎
‎“We plan on listing on stock exchange to raise capital. After that, convert to a commercial bank,” he said.
‎
‎Manufacturing currently accounts for between 15 and 20 per cent of the company’s lending portfolio, but the share could rise to between 50 and 60 per cent, reflecting the sector’s importance to the real economy.
‎
‎“As of now we have probably 15% or 20% in manufacturing. Ideally, because that’s the real sector, ideally it should be as high as maybe 50 or 60%,” Temitope said.
‎
‎He identified currency devaluation, power costs, shortage of skilled personnel, infrastructure and security as some of the challenges facing manufacturers, adding that longer-term capital was needed to support the sector.
‎
‎Beyond direct lending, the company is considering financing businesses across manufacturers’ value chains, including power providers, security firms and suppliers of intermediate products.
‎
‎“The second part is value chain financing, which means we can fund you and fund everybody in your value chain,” he said.
‎
‎The company has also established a $10 million circular economy impact fund with the Dutch Consulate and other partners to finance projects in Nigeria, including recycling and clean energy.
‎
‎Runsewe said the fund, signed off the previous month, followed an investment in a recycle company about five or six years ago, which showed the potential impact of circular economy businesses at scale.
‎
‎He said businesses in the sector often struggled to attract funding because investors and lenders had few track record to follow.
‎
‎The company would therefore provide financing as well as support to businesses in the sector, including guidance on regulatory issues and other challenges.
‎
‎“We not only fund you, we also guide you,” he said.
‎
‎Runsewe said investment decisions were based on risk-weighted commercial returns and impact returns, with the company seeking investments that offered both high returns and high impact.
‎
‎“We always go for the things that have high returns but also high impact,” he said.