Heritage Bank plans N100b for SME Development

There were indications that Heritage Bank Limited is planning to increase its lending portfolio to Small and Medium Scale Enterprises (SMEs) to N100 billion by the end of 2016.

The bank currently has committed about N23.5 billion in its operations over two years ago, but may have renewed plans for more risk taking, especially with the acquisition of Enterprise Bank Limited, which offers it more outlets.

The Head of SME Product, Concept, Ideas and Development, Heritage Bank, EkeneMaduake, made the disclosure in Lagos at the yearly Finance Correspondents Association of Nigeria (FICAN) conference.

Speaking on Heritage Bank’s perspective on the theme of the conference, ‘Banks and SMEs in Nigeria: Prospects, Challenges and Success Stories,” Ekene reiterated the financial institution’s support for SMEs.

“By the end of the 2016 financial year, we intend to grow this volume to about a N100 billion. We have already started working towards achieving this goal,” he said.

He disclosed that based on the understanding that SMEs are the engine of growth in any economy, the bank has supported various sectors in the SME space, especially those that have the potential of creating more employment in the system.

“We have supported SMEs operators in the area of bottled water production, printing companies, beverages, those in the agricultural sector and other operators in the SME space,” he stated.

However, in the process of engagement with this sector, he said the bank noticed certain challenges- one of such is that an average SME operator in Nigeria does not have a streamlined book keeping and accounting records.

As a result of this, it is difficult to get reliable records to base judgment on the true worth of their businesses and in most cases “we are constrained to rely on the customers’ banking activities. What the bank is specifically doing to get them improve on this, is to render advisory services to them.

“We interact with them on day to day basis, and on monthly basis. We organize advisory workshops where we take them through the rudiments of running businesses better, for the ultimate benefit of the economy,” he said.

He explained that one of the areas Heritage Bank has helped SME operators, is how to differentiate between a company’s business operational cashflow and that of personal cashflow.

“We do this to enhance shared value, because as their businesses get better, we also get better as a bank. It is also another way of reaching the unbanked,” he stated.

Source: Guardian News