13th November, 2012
Sterling Bank Plc has expressed its readiness to assist Microfinance Banks (MfBs) to access N220 billion Micro, Small and Medium Enterprise Development Fund (MSMEDF) to be launched by the Central Bank of Nigeria (CBN) this week.
Managing Director, Sterling Bank Plc, Yemi Adeola disclosed this at the MfB Customer Forum organised by the bank last week in Lagos.
He said the fund is to provide wholesale funding for MfBs and microfinance institutions for on-lending to small and medium enterprises.
The bank CEO listed other funding opportunities into which the MfBs can key to include the N5 billion small business development funds, $4 million renewable energy project, and $200 million provided by Ford Foundation to enable them increase their market penetration.
Adeola said the plan is part of the apex bank’s initiatives to strengthen the MfB sub sector to enable it play its primary role of financial support for the grassroots economy.
He said Sterling Bank is proactively positioning its key customers in the MfB sub sector to benefit from the MSMEDF when it is eventually launched.
The Sterling Bank boss said Nigerian banks concentrate on big customers, not understanding that 50 to 60 per cent of finance in the economy comes from the Small and Medium Scale Enterprises (SMEs), stressing that unless banks refocus on SMEs, the economy will not grow.
He said the MfBs need enablers such as commercial banks to be able to access the fund and other intervention finances from the apex bank to the sub sector, adding that there is also a N600 billion agricultural development fund, which the bank has already assisted several customers to benefit from.
Chief Finance Officer, Sterling Bank, Abubakar Suleiman said the bank believes strongly in strategic partnership and is already partnering some MfBs in relation to electronic business, agricultural finance among others.
“We identify with the brand promise of MfBs and believe that there is need to leverage on technology to increase their retail penetration and enable their customers enjoy electronic banking facilities,” he said.
Consequently, he said the bank will be assisting the MfBs on co-branded card issuance, e-payment inflows, global teller, Automated Teller Machine (ATM) deployment and mobile banking.
He said such services will enable the lender increase customer patronage, enhance deposits, revenue and boost efficiency through automation of operations. He said Sterling Bank has increased its exposure to the agricultural sector and will continue to do that going forward.
Managing Director, Support Microfinance Bank, Sunny Akhamiokhor said the step taken by the Sterling Bank is commendable.
He said the process of accessing intervention funds from the CBN has been hectic for the subsector, adding that the move by the lender to mediate between the MfBs and CBN on the intervention funds will address such hitches. “We commend Sterling Bank for taking the bold step to reach out to the MfBs. We want the bank to keep its promises because access to funds has remained our biggest limitation in the industry,” he said.
Akhamiokhor said the bank should also extend other cost cutting measures including reducing commission on turnover (COT) and other banking costs that burden the subsector’s operations