FirstSME: Driving economic growth through effective support for small businesses

In recognition of the significant roles that Small and Medium Enterprises (SMEs) play in achieving sustainable economic growth, First Bank of Nigeria Limited has intensified its supports for small businesses with the creation of the FirstSME account. MOTOLANI OSENI writes on how the account is driving Africa’s largest economy while effectively supporting SMEs towards the sustenance and expansion of their businesses.

The SME sector is the backbone of major developed economies, as well as important contributors to employment, economic and export growth. For instance, in Nigeria, SMEs contribute 48 per cent of national Gross Domestic Product (GDP) and account for 96 per cent of businesses and 84 per cent of employment. To this end, SMEs are, therefore, regarded as the engine of economic growth and equitable development in developing economies.

A recent survey conducted by the National Survey on Micro Small and Medium Enterprises (MSMEs) revealed that the figure of active small businesses in Nigeria has risen to 41, 543,028 which indicates that they are labour intensive and capital saving.

Banks role in SMEs growth

Since SMEs are important to Nigerian economic growth, it is imperative to reconsider the problem hindering the growth of the sector. Although, there have been numerous opinions and commentaries on the role banks should play in financing and advising small scale enterprises. But available facts have indicated that some lenders are doing the little they could do to create opportunities for the SMEs through access to credit and bank loans to grow their businesses.

However, the fact remains that small businesses still lack adequate support from financial institutions to realise their dreams and enable them to contribute effectively to the economy.

However, the First Bank Nigeria Limited over the years has identified SMEs as critical to the country’s economy as they possess great potentials for employment generation, improvement of local technology, output diversification, development of indigenous entrepreneurship and forward integration with large-scale industries.

FirstSME Account

FirstSME account is FirstBank’s value proposition geared towards building the capacity of SMEs to deliver business goals and contribute even more significantly to national development. The leading financial institution identified that small businesses are the ultimate drivers of the economy, and when they are under-utilized and not given the much-needed support to thrive, it has an overriding effect on the overall growth and development of a Nation.

In a demonstration of its commitment to the SMEs, FirstBank’s launched the ‘’FirstSME account’’ to provide the desired financial services to meet the needs unique to the SMEs customers as well as efficiently and effectively drive business sustainability and expansion strategies essential to taking small businesses to the next level.

The FirstBank’s leading SME Initiative – FirstSME account – was specifically created in August 2020, to support SMEs towards the sustenance and expansion of their businesses.

The FirstSME account, which comes in two variants – FirstSME Classic and FirstSME Deluxe – is offered to SMEs irrespective of industry and a tailor-made current account with a clear value proposition aimed at harnessing the huge opportunities available in the SME sector in Nigeria.

The product also exposes SMEs to a wide range of services that are essential for their continued growth and playing their roles in contributing to national development.

Apart from supporting SMEs, the FirstSME account is also available to all non-individual entities like Limited Liability Companies, Public sector institutions, Enterprises/Sole proprietorships, Partnerships & Associations, Religious Bodies, Traders NGOs.

Why the FirtsSME?

In recent years, much emphasis has been on the growth of small and medium scale industry, to reduce the rate of poverty and unemployment in the country. To improve access to finance by SMEs, First Bank in its specialized SME proposition, created the FirstSME account’’ which creates an atmosphere for SMEs to build, grow and scale their businesses at zero charges.

The FirstSME account is unique when compared with other SME accounts operating in the Nigerian banking industry. Another thing that makes the product stands out from products of other banks is that FirstSME customers get to enjoy services such as; zero account maintenance charge, access to webinar/training, various credit facilities, workplace resources, access to SMEConnect portal and directory and it is specially made for MSMEs and SMEs.

Since the creation of the FirstSME account, it has been beneficial to a lot of companies, especially SMEs, due to its enhancing capacity to sustain growth. Holders of these accounts have access to the bank’s Temporary OverDrafts (TODs) and other facilities subject to meeting the Risk Adjustment Capital (RAC) of each product.

SMEs would also have access to immediate enrollment on all digital platforms; free access to FirstBank SME events; free access to extensive business promotional and networking opportunities on the SMEConnect portal; access to a wide range of discounted and promotional offers and access to SMEConnect.

For instance, the FirstSME classic account is specially designed for small-scale enterprises and provides the necessary support to scale businesses with a minimum operating balance of N50,000. It also has the following exciting features for SMEs: Minimum opening balance of N50,000. Zero annual maintenance charge subject to minimum operating balance and turnover limit.

Turnover limit caps at N100million with annual maintenance charge on the excess at N0.50k/mile, Access Temporary Overdraft (TOD) and other facilities subject to meeting Risk Acceptance Criteria (RAC) of each product.

The FirstSME deluxe account, on the other hand, is specifically designed for medium-scale enterprises, providing the needed support to grow and scale businesses with a minimum opening balance of N500,000. The FirstSME deluxe account has the following features that make it attractive to SMEs

Both categories of accounts also give the SMEs access to FirstBank’s SME events and access to other digital products on the SMEConnect platform as soon as the customers indicate on the form. Overall, the FirstSME account is one of the numerous opportunities designed to empower SMEs to continually drive impact as the backbone and contributor to employment and economic growth.

Other Benefits

Another available opportunity for operating the FirstSME account is its connection to the SMEConnect initiative of FirstBank which is a platform through which SMEs access the bank’s unique description that will equip them with the essential tools required for the growth of their business.

The SMEConnect portal is also designed to help SMEs identify various gaps affecting the growth of their business. Beyond financial support, SMEConnect offers strategic advisory services, business seminars periodic updates as well as information that will guide you in growing your business.

The portal is designed to help SMEs access the Bank’s unique propositions and identify various gaps that hinder their business growth. Currently, there are 4,225 registered businesses and 20,880 users on the platform.

SMEConnect serves as a medium of connecting SMEs to these solutions from the comfort of their offices, homes, and anywhere they are in the world. The uniqueness of the platform lies in the fact that these offerings are either free or substantially discounted.

Importance of SMEConnect

SMEConnect is created to bring under one umbrella relevant resources, products and services aimed at helping SMEs in Nigeria. FirstBank has tailored-made products targeted at the specific needs of SMEs in Nigeria. These loan products have been designed for financing the activities of Small and Medium Enterprises (SMEs) under the U-First Scheme.

The leading financial institution also provides Business Advisory and Support services and business-oriented credit access, customer/market, financing structure, access/availability of raw materials sales/cash flow projections, marketing/distribution/logistics and business strategic plan.

The platform provides other features including the SME Connect blog, business categories, e-newsletter, special offers and upcoming events and programmes.

How FirstBank addressing SMEs challenges

Despite the significant contribution of SMEs to the Nigerian economy, challenges that hinder the growth and development of the sector persist. Although significant growth has been achieved in the MSME sector, there is still much to be done.

According to an article on “developing Africa through effective, socially responsible investing”, “there still exists a ‘missing middle’, which finds it hard to access funds due to the category of funding they belong to.”

Other challenges encountered by the sector include lack of skilled manpower, the multiplicity of taxes, and the high cost of doing business, among others.

The FirstBank’s FirstSME account has provided an answer to some of the SMEs challenges by its readiness and commitment to providing the Nigerian SMEs with the necessary support needed to grow their various businesses.

For any SMEs company to move its business to the next level- both locally and internationally-, such business owner needs to open the FirstSME account to avail him/herself of all the advantages provided by First Bank of Nigeria through its SMEConnect.

Due to the great economic potentials of small businesses in Nigeria, attention has been drawn to the sector, while financial analysts believed that they employ approximately triple the number engaged by large scale manufacturing.

The FirstBank FirstSME account will go a long way to reducing the cost of operating corporate accounts which frees up funds for the beneficiaries to grow their businesses faster. The resultant effect on the economy is the increased growth of small businesses across the country.

The lender leads in creating platforms to stimulate and advance the growth of small and medium scale businesses, but the government needs to create a clear vision and a more aggressive path.

According to the Chief Executive Officer of FirstBank Limited, Dr Adesola Adeduntan, the bank has a cocktail of products and bespoke solutions, specifically designed to help grow and sustain SMEs; enabling them to play out their business activities as well as fulfil their goals and aspirations.

In addition, the bank offers advisory services that are tailored to meet the needs and aspirations of their SME customers.

He said the bank is enthusiastic about the SME segment as one of the strategic platforms to stimulate economic development.

“We have SME CONNECT portal which serves as an advisory services platform to help them up to their skills, supporting them to make accurate decisions and several banks have a similar support system. We refine and update the portal. Our SMEs portfolio is quite sizeable considering Nigeria’s population.

“Our support for relevant businesses helps us come far especially the SMEs. We have been active in providing various financing instruments. The path to growth and development of the Nigerian economy is growing the SMEs segment,” he said.

Meanwhile, different products of the First bank attest to the positioning of the bank to deliver unequal service to the small and medium scale business sector.

For instance, the Economy and You, program that highlights essential capacity development for startups was conceived to deliver information that will inspire and support the growth of SMEs in Nigeria.

The bank is the biggest lender to the SME sector in Nigeria, supporting70,703 SMEs over the last three to seven years, with over N170 billion as loans in recent time.

Also, through partnerships with organized small scale industries associations, the bank has a single-digit lending rate for members, smashing the high-interest rate phenomenon, the very first steel ceiling that inhibits the inclusion of small businesses in the corporate lending circle. This has been widely recognised as a major step to advancing the Nigerian SME to the next level.