In order to address the issue of inadequate financing faced by MSMEs in the country, Access Bank came up with an innovative loan portfolio to improve access to credit for its MSME customers
This innovative approach enabled Access Bank grant about N37 billion in new loans to 11,000 MSME customers last year.
According to Ayodele Olojede, Head, Emerging Business, Access Bank Plc, 30 percent of these loans were granted to women through Access Bank’s W-Power initiative and in 2017, 8000 MSMEs received N22 billion in new loans.
This year, the target is to engage 30,000 MSME customers by providing them with loans and so far, 12,000 MSMEs have been engaged this year. Olojede said
Access Bank grants MSMEs (especially women-owned MSMEs) collateral-free loans with flexible interest rates as working capital and for the procurement of equipment in the education, health and tech sectors.
In essence, the loans are to cover the purchase of buses, books, and laptops for schools; drugs, beds, and other medical equipment for hospitals.
The loans are with a capital of up to four million in the health sector and 10 million in the sector of education.
With only a proper credit and sales records, a business can access a loan from Access Bank under this new lending approach.
“There are funds available for businesses, even those with a concessionary rate as low as nine or 15 percent for women, but customers still can’t access these funds due to poor bookkeeping, the bank needs to see your financial records to be able to give you loans.” Olojede said
Customers of other banks can also access these grants/loans if they meet the criteria of having a business record and can provide a bank statement. “We can give you a loan even when you are not our customer. What we require is that you keep the money in a bank as we are trying to ensure your participation in the formalised sector,” Olojede added.
Access Bank in partnership with its lawyers ensures that businesses are registered to enable them access loans.
Access Bank also organises MSME clinics (involving one-on-one engagements with professional business consultants), business workshops and leverages the National Collateral Registry (NCR) to register the type of assets that customers own to ensure that this new loan portfolio is sustainable and profitable