By Jeph Ajobaju, Chief Copy Editor
In all economies, developed and developing, MSME (Micro small and medium enterprises) are the backbone of growth. They pump creative energy into a variety of ventures in villages, towns, and in cities, and employ hundreds per firm.
SMEs are non-subsidiary independent firms whose number of employees ranges across countries from 10 to 199.
Big businesses, in technology, in oil, in agriculture, and in services may have billion dollar portfolios and employ thousands across countries and continents. They fly on their wings.
SMEs, however, remain the engine of any economy, cutting across every sector and providing a wide-range of services that are essential to meeting the everyday need of individuals, businesses, government institutions.
These are the sort of firms FirstBank especially caters for in Nigeria because of their vital role in providing goods and services, as well as jobs, to support individuals, households, and bigger businesses – the pillars of the overall economy.
FirstBank and SMEs
FirstBank itself has 16,000 employees, the largest in the financial sector, but it knows firsthand the needs, the struggles, and the survival quest of SMEs because the bank deals with them daily as its contractors and corporate customers.
SMEs operate across all the value-chains in all sectors of every economy, providing goods and services without which individuals cannot meet their needs and bigger companies cannot operate, thrive, and make profit.
Business that own assets (excluding land and building) of up to N500m are regarded as SMEs by SMEDAN and NBS. In FirstBank business with less than N1billion are classified under SME segment.
But their importance is stressed by the Central Bank of Nigeria (CBN) which pitches greater customer access to facilities to stimulate economic growth.
This is what FirstBank has done by creating SMEConnect, a platform that connects its more than 30 million customers served in over 750 business locations and over 100,000 Banking Agents spread across 99 per cent of the 774 councils in Nigeria as well as the public at large to opportunities that are integral to giving their businesses a boost; irrespective of size, industry and location.
FirstBank also extends financial services, through subsidiaries, to over half a dozen countries across three continents – in London, Paris, Republic of Congo, Ghana, The Gambia, Guinea, Sierra Leone, Senegal, and a Representative Office in Beijing.
SMEConnect links SMEs to offerings covering financial and non-financial services built around seven key pillars to create a functional ecosystem for SMEs to thrive.
The seven pillars connect SMEs to:
• Capacity Building
Run varying degrees of entrepreneurship programs and activities through trainings, workshops, seminars, business clinics and webinars.
• Finance
Provide direct and indirect funding for SMEs throughout the business life-cycle via grants, debt/loans and equity.
• Market
Connect SMEs with integration into large distribution networks by providing connection to facilitate trade, customers, distributor channels, suppliers, large corporates.
• Infrastructure
Connect SMEs to infrastructural resources such as technology, internet services and workspace
• Talent (for Business development)
Connect SMEs to a pool of professionals covering key areas such as accountants, lawyers, digital marketers, consultants, et cetera.
• Resources
Connect SMEs with to data, information, tools; that is, productivity tools, accounting tools, et cetera.
• Policy and Advocacy
Inform SMEs on government policies and how they impact SMEs.
SMEConnect portal
The FirstBank’s SMEConnect website (https://smeconnect.firstbanknigeria.com) is an initiative by the Bank to give businesses a platform to showcase their businesses, whilst being a connecting point to a wide range of opportunities to strengthen their business.
· Education/Training (304 business)
· Manufacturing (218 business)
· Trade (444 businesses)
· Agriculture (432 businesses)
· Hospitality (103 businesses)
· Transportation/Logistics (118 businesses)
· Trade (216 businesses)
· Telecommunications (190 businesses)
· ICT (320 businesses)
· Health Care & Fitness (88 businesses)
· Sports (20 businesses)
· Fast Moving Consumer Goods (FMCG) (30 businesses)
· Financial services (191 businesses)
· Media/Entertainment (141 businesses)
· Food (145 businesses)
· Real Estate (90 businesses)
· Engineering/Construction (211 businesses)
· Fashion/Beauty (166 businesses)
· Oil & Gas (37 businesses)
· Services (221 businesses)
The portal contains the names of companies in all the sectors and their telephone numbers and email addresses for contact with one another and with customers.
The blog section offers counsel on key areas of business such as
· 7 tips for Building and Maintaining Good Customer Relationship
· SME Business Longevity: remaining in business post COVID-19
· What is Market Share and How Does it Affect my Business
· How to Successfully Separate your Financial Business Account from your Personal
· Common Characteristics of Entrepreneurs in Nigeria
· This Social Media Thing, How Can My Business Gain from It?
· To Meet or Not to Meet: 8 Ways to Detect and Avoid Unnecessary Meetings
· How Can a Nigerian Company Maximize Ethnic Diversity?
· Big Secrets Companies That Succeed at Online Marketing Pay Millions For
· 4 Ways to Empower Women in Your Organization
· 4 Things Your Brand Must Do to Survive in a Digital World
· How to Write A Winning Business Plan – Part 1
· How to Write A Winning Business Plan- Part 2
· You Will Kill Your Business Faster Than Your Competition
Uniqueness of SMEConnect
The unique selling proposition (USP) of SMEConnect is the congregation of value-adding products and services on one platform for easy access and at rates (prices) that are competitive and (in most cases) discounted.
SMEConnect has special features such as Business Diagnostic tool that evaluates your business and gives you a business effectiveness score. It also tells you what you have done well and what you need to improve on.
Other features include blogs, e-newsletter, and useful webinar content.
Benefits of joining SMEConnect
1. Free business advisory services through our Business Diagnostic tool
2. Showcasing your products/services FOR FREE
3. Interacting with your customers and other SMEs
4. Discount on business development resources such as booking a business coach
5. Connection to free capacity building workshops, seminars and webinar
6. Updates on policies and regulations impacting SMEs
SMEs can join the SMEConnect community by visiting https://smeconnect.firstbanknigeria.com/ to sign up for free.
Number of businesses on SMEConnect portal
There are 4,225 registered businesses on the platform; however, there are 20,880 users.
Pre-requisites for SMEs to be listed on the portal
Business must be registered and have a corporate account with FirstBank to list their business on the hub and access all the beneficial offerings on SMEConnect.
However, individuals and businesses can register to be users of SMEConnect without listing their business.
Industry spread of these businesses
SMEConnect is open to businesses operating across all sectors.
Businesses who wish to list their businesses on the hub – in addition to being registered and having a corporate account with FirstBank – must accept the Terms and Conditions (T&Cs) of the platform.
Reasons for creating SMEConnect portal
Having banked SMEs for over 127 years, we recognize that SMEs need more than financial services to thrive and grow their businesses.
Based on its engagement with customers, internal and external surveys, and reports by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the National Bureau of Statistics (NBS), First Bank observed that SMEs are plagued with challenges that impede their business growth.
The challenges include:
· Poor business structure
· Lack of infrastructure
· Poor market penetration
· Limited access to information and professional services
· Inconsistent government policies
These in turn affect their ability to access finance.
First Bank created SMEConnect to bridge the gap and connect SMEs to resources, products and services that will enable them to overcome these challenges – with the seven pillars of our SME proposition (Capacity Building. Finance. Market. Resources. Infrastructure. Talent for Business Development. Policy and Advocacy).
SMEConnect links SMEs to these solutions from the comfort of their offices, homes, and wherever else they are in the world. The uniqueness of the platform is that these offerings are either free or substantially discounted.
Overview of key discount offerings by partners
· Customers currently enjoy up to 34% discount when they request for a business coach on SMEConnect (https://smeconnect.firstbanknigeria.com/offers/details/74/smetraction-package-i).
· FirstBank Business Diagnostic tool (https://firstbank.typeform.com/to/sYbWf0) analyses the business and advises on areas of strengths and improvement.
· FirstBank corporate customers can advertise, display, and interact with customers for free.
Other offerings will be announced soon, according to the bank.
Importance of SMEs
In South Africa, SMEs account for 91 per cent of businesses, 60 per cent of employment and contribute 52 per cent of total Gross Domestic Product (GDP), according to a survey by PricewaterhouseCoopers (PWC).
In Nigeria, SMEs contribute 48 per cent of GDP, account for 96 per cent of businesses and 84 per cent of employment.
Despite the significant contribution of SMEs to the Nigerian economy, there are still challenges that hinder the growth and development of the sector.
NBS data shows that SMEs in Nigeria have contributed about 48 per cent of GDP in the past five years. In a recent NBS SME 2017 report, there are currently 41.5million SMEs in the country.
Though significant growth has been achieved in the MSME sector, there is still much to be done.
An article on Developing Africa through effective, socially responsible investing quoted on pwc.com/ng says “there still exists a ‘missing middle’, which finds it hard to access funds due to the category of funding they belong to.”
Other challenges encountered by the SME sector include lack of skilled manpower, multiplicity of taxes, high cost of doing business, among others.
A survey conducted by the NBS in collaboration with SMEDAN shows that SMEs can absorb up to 80 per cent of jobs, improve per capita income, increase value addition to raw materials supply, improve export earnings, expand capacity utilisation in key industries as well as grow the economy and GDP.
CBN focus on SMEs
A survey conducted by SMEDAN shows that Nigeria has 41.5 million SMEs as at 2017, exceeding those in the United States.
“SMEs are critical to the development of any economy as they possess great potentials for employment generation, improvement of local technology, output diversification, development of indigenous entrepreneurship and forward integration with large-scale industries,” the CBN says on its website.
“In Nigeria, there has been gross under performance of the SMEs sub-sector and this has undermined its contribution to economic growth and development.
“The key issues affecting the SMEs in the country can be grouped into four namely: unfriendly business environment, poor funding, low managerial skills and lack of access to modern technology (FSS 2020 SME Sector Report, 2007).”