Small and Medium Enterprises (SMEs) have invariably played a substantial role in the Nigerian economy, serving as relevant contributors to employment, economic and export growth.
A survey by the Nigeria Bureau of Statistics (NBS) revealed that SMEs contribute over 48 percent to the national gross domestic product (GDP) and account for an estimated 96 percent of businesses, which in turn creates about 84 percent of employment across Nigeria’s 36 states and the Federal Capital Territory (FCT).
Despite the significant contribution of SMEs to the Nigerian economy, challenges still abound that hinder the growth and development of the sector and one of the most prevalent is the limited access to capital and financing, a factor that has resulted in the dearth of several startup businesses.
To address this challenge, Stanbic IBTC Holdings Plc, a member of Standard Bank Group, recently introduced a short term loan facility aimed at augmenting working capital to finance various business projects and bridge urgent cash flow needs of small and medium enterprises (SMEs).
The loan solution, according to the lender, enables SMEs to take loans with ease and convenience and also offers exclusive benefits, which include repayment flexibility and limited documentation with no collateral, while the temporary overdraft provides financial credits to both new and existing customers within 24 hours, with a maximum loan repayment duration of 90 days.
The bank also stated that the SME temporary overdraft was created to ensure that SMEs are not pressured to remit the loan immediately, as the repayment plan is flexible and is based on the cash flow of the enterprise.
This, it explained, creates some form of stability for the enterprises, which will, in time, bolster the financial sector and improve the Nigerian economy in general.
According to Stanbic IBTC, application for the SME short term loan requires minimal documentation, making it easy for SMEs to access funds for necessary costs and other business activities unlike regular loans which usually require cumbersome documentation, including loan purpose papers and collateral.
Speaking on the relevance of the product to SMEs, Ayodele Ojosipe, head, enterprise banking, Stanbic IBTC Bank, emphasised that the product was created for businesses that require financial assistance for commercial transactions as well as their day-to-day business transactions.
“One major issue for SMEs is access to funds that aid the growth of their business and because at Stanbic IBTC, we understand how important funds are to the success of any business, we came up with this offering to ease the aftermath of the pandemic,” he explained.
