Eleven Nigerian banks, led by the country’s oldest financial institution the Bank of Industry (BOI), have partnered to fund the establishment of small and medium enterprises (SMEs) in the West African country.
The partnership also includes Access Bank, Diamond Bank, Ecobank Nigeria, Fidelity Bank, First Bank Nigeria, First City Monument Bank, Skye Bank, Stanbic IBTC, Standard Chartered and the United Bank for Africa.
As part of the partnership, the eleven banks with collaborate on providing long-term loans to qualifying SMEs.
Rasheed Olaoluwa, managing director of the BOI, said the arrangement was motivated by the knowledge SMEs in Nigeria faced obstacles to growth due to lack of finance.
“BOI therefore decided on a multi-pronged approach to addressing the problem of poor loan packaging and access to finance,” he said. “The first approach was the recent accreditation of 122 Business Development Service Providers (BDSPs) located all over the country. Another strategy was to approach SME-friendly commercial banks to partner with BOI in co-financing the SMEs.”
He said the partnership aimed to further develop Nigeria’s exciting SME sector and boost the country’s economy.
“The synergy that has evolved between BOI and the SME friendly banks, which is unprecedented between a development finance institution and commercial banks, will undoubtedly foster greater access to finance for SMEs, financial inclusion for Nigerians and also engender wealth creation and accelerated job creation for Nigerians,” Olaoluwa said.
“It is also our expectation that the SMEs that will benefit from this partnership will be good corporate citizens and meet their financial obligations to the partnering banks. This will stand them in good stead for consideration for larger loan amounts with the hope that they will in the near future metamorphose into large enterprises.”