The Small and Medium Scale Enterprises (SMEs) have been described as very strategic and critical to Nigeria’s growth, especially now that the economy is passing through challenges.
Besides, the government has been urged to hinge its current economic diversification efforts on a massive support for the SMEs as being done in many developed countries.
The General Manager and Divisional Head, Retail and SME Banking of Heritage Bank Limited, Davidson Regha, who spoke with journalists in Lagos, reiterated that many of the developed economies today have SMEs as the support base of their big corporations, whether in America, Europe, Latin America or Asia.
“That is the way to go as a country. If we do not support the SMEs, the economic growth we are all talking about will not happen. We should see the SMEs as the catalyst to change and economic growth the government is talking about,” Regha said.
Regha submitted that the SMEs, being a critical sector of the economy deserve the support of banks and every institution of government because it is the engine of the nation’s economic growth.
Quoting from the National Bureau of Statistics (NBS), he noted that SMEs contribute about 48 per cent to our national Gross Domestic Products (GDP), which also translates to about 48 per cent of the total labour force in the country.
Disclosing that SMEs are part of the vision and corporate strategy of Heritage Bank, he said: “If you focus on the SMEs, it means you have to meet with entrepreneurs at the incubation stage of their business. And if you are to help them grow and become very big and successful, that means you will be able to transfer wealth from one generation to the other.
“If you say dealing with the SME sector is very risky, which is why a lot of institutions are apprehensive, I would agree with you, but banks are set up to manage the SMEs to reduce their risks and make them good and successful ventures,” he said.
He noted that the major ways that banks can help the SMEs include helping them put a structure in place, providing advisory service and mentoring them, as the greatest challenge the SMEs face in Nigeria is not just lack of proper funding or capital, but lack of structures.
“For us at Heritage Bank, we try to de-risk them and put structures in place for them. If there is no structure, you will see a man who has done business for ten years and if he is not there anymore, the business dies. As a matter of fact, we de-risk these businesses by taking away the human wastes that exist in their environment, which ensures that the business runs with or without the owner,” he maintained.
To stem the mortality rate of SMEs in the country, Regha disclosed that his bank last year, established an SME Clinic, which is like a laboratory where the bank invites the SMEs to the clinic and put them through basic business training and strategies like book keeping, account keeping and how to put structures in place to separate the business and create functional units and establish proper division of labour that will help the business.
To drive this further, he said the bank has also set up the NYSC Graduate Scheme, which is another platform the bank is using to create gainful employment.
“It is actually a scheme for the NYSC for, which we have earmarked N200 million to assist Nigerian graduates with brilliant business ideas. We have set up centres all over the country to drive this scheme.
“The beneficiaries emerge from a competition that is organised for people at that level and the person or group of persons with the most brilliant ideas get funding from Heritage Bank,” he said.
