Access Bank Plc has blamed the poor organisational structure of small and medium scale enterprises (SMEs) in the country as one of the factors obstructing lending to the sector.
However, the bank restated its resolve to continue to work with SMEs in order to grow their businesses.
Speaking at a forum for SMEs in Lagos, Head, SME Desk, Access Bank, Mr. Oyediji Atoyebi, noted that small and medium businesses are crucial to the development of any nation.
Furthermore, he described SMEs as the main driver of employment in any economy.
“The recapitalisation of the banking sector has enabled the growth of the sector with more banks offering credit facilities to eligible businesses.
“Owing to the organisational structures of majority of SME businesses and other organisational challenges, many banks find it challenging to accurately profile SME businesses and analyse their financial standing,” he added.
Continuing, he pointed out that Access Bank is providing access to finance to operators in the sector.
Atoyebi said Access Bank intends to bring down cost of banking for the SMEs as well as to provide financing at all levels of the value chain in the sector.
He also identified key issues in the sector to include poor funding, low managerial expertise, poor project feasibility study/business case, lack of proper book-keeping and absence of corporate governance.
Furthermore, Atoyebi listed the challenges confronting the SMEs to include unavailability of basic infrastructure, such as electricity, road, and logistic issues, among others; pricing competition, inability to access credit facilities and collateralisation of advanced credits.
He identified the critical success factors for the SMEs to include access to funding, extensible business architecture, government policies and capacity building.
He added: “There is need for facilitation of the exchange and dissemination of knowledge and information and proper business feasibility plan.
“There is also the need for capacity and competence building, formal and informal training in educational institutions and training of technical manpower in firms and organisations.”
He also called for the availability of investment account products to help manage surplus cash flow and provide acceptable yields for customers.
He stressed the need for favourable government policies to promote growth in business as well as the provision of regulatory framework, measures, standards and quality functions, such as product quality tests and provision of incentives to develop new products and services.
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