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First Bank introduces non-collateral loans for SMEs

By BusinessNews Staff on March 28, 2014

First Bank of Nigeria has introduced non-collateral loans for Small and Medium Enterprises.

The bank said the move was meant to drive the growth of the SME sub-sector.

The Head, SME Banking, Mr. Oluwafemi Akinfolarin, who spoke at the bank’s product fair event in Lagos recently, said the development would help the SMEs to overcome the challenge of lack of access to credit.

He said, “Getting loans without collateral is part of our contribution towards boosting the growth of the SME segment. Most SMEs don’t have collateral to secure loans. With this now, all a prospective borrower is asked to do is to go through a psychometric test. Once the SME passes it, we advance the loan. That is a cutting edge innovation.”

As part of its major initiatives for this year, Akinfolarin said the bank had outlined a number of capacity development events for the SME operators.

The events, he said, included conducting free SME seminars in eight regions across the country.

He said, “We focus on the SMEs because it is the highest employer of labour in any economy. About 17 million people are currently employed by this sector in the country. This year, we are planning a capacity development programme for the SMEs because the sector has serious skills deficit. Most SMEs are not able to turn their ideas into sustainable business.”

As part of its programme for the year, Akinfolarin said the bank would also hold a healthcare summit in partnership with the International Finance Corporation.

“We plan to increase banking relationship with specific industries such as healthcare, entertainment, online and commerce. We intend to increase product sales per each customer for the segment; and also strengthen our differentiated services offerings to these customers,” he added.

Meanwhile, the bank has also introduced 3AL portal, a self-service tool which enables businesses to set up their online store, upload their products and interact with potential consumers.

The Head, Virtual Product, Mr. Seye Olowokere, said the portal would help to create visibility for the SMEs’ products.

According to him, the bank allows the SMEs to register their firms free of charge on the portal.

He said, “Business owners and consumers can login with Facebook profile. Businesses and consumers can post comments on displayed products; consumers can chat with businesses through an online chat engine.

The portal, Olowookere said, also allowed online payments to be made for products bought; adding that the delivery of such ordered product would be done by a global courier company.

Outlining the benefits of the 3AL Portal, he said it “creates online visibility for businesses at no extra cost; facilitate access to market for products; provides an opportunity to interact with buyers and potential clients from all locations in Nigeria and globally; reduces the cost of doing business since customers can order for goods without visiting business location; and increased the reach and sales turnover.”

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