In a dynamic and often unpredictable financial landscape like Nigeria, the ability to access funds at critical moments makes all the difference.  For entrepreneurs, financial agility is often the key to unlocking growth and success. With fluctuating prices and unexpected financial policies, many businesses in recent times have found themselves in need of short-term financial solutions to keep their business running smoothly. Recognising this challenge, First Bank of Nigeria Limited, a pioneer in innovative financial solutions, redesigned the Retail Temporary Overdraft (RTOD) as a lifeline to empower businesses with swift, flexible cash flow support that can significantly empower business owners, allowing them to navigate the complexities of business management with greater ease.

The Retail Temporary Overdraft (RTOD) is aimed at providing customers with flexible temporary overdraft to meet urgent business financial needs.  The features of RTOD include:

Access up to N5 million monthly subject to 10% of 6 months credit turnover from sales

Interest rate is competitive and subject to changes in money market realities

No tangible collateral is required

Facility tenor is 30 days, and this can be accessed up to 12 times in one year.

The benefits of this Facility include assistance in growing business volumes which position SMEs for higher facility limits. It is useful in emergency situations to meet urgent business needs. No tangible collateral is required to get the loan, and it is available throughout the year once the existing facility is repaid within 30 days. The interest rate is cheaper due to the shorter facility tenor.

SMEs with regular cash flow who have maintained an account with FirstBank for a minimum period of six [6] months or 12 months in any other commercial bank are eligible for this facility. The amount drawable on this facility is N5million monthly, subject to 10% of the customers’ last 6 months credit turnover. Repayment is automatically deducted from (Sales or business proceeds) incoming receivables into borrower’s account within the stipulated time. To apply, customers need to show interest by contacting the FirstBank SME advisor or apply online by submitting the required documents. Approval could be as fast as 24 hours in cases where the customer fulfills all criteria.

To ensure that customers can maximise given opportunities and enjoy maximum turnover, the loan figure is N5 million globally for qualified customers who show a good track record of prompt repayment and also meet the stipulated criteria.

READ ALSO: Nigerian pilgrims begin second journey from Madina to Makkah

There are many customers who have been able to turn their businesses around with the help of this facility, such as Mr. Isola, the prime mover of Champion Five Limited, a food retail vendor who approached FirstBank for funding to augment his working capital and increase production.  The bank provided a N5 million overdraft facility with a 30-day tenure which was made available to him for 12 months.  With the funding, Champion Five Limited was able to increase production by 50% and expand their customer base as well as employ more staff. The company has continued to grow in leaps and bounds.

FirstBank’s Retail Temporary Overdraft product has been so impactful to the businesses of both male and female entrepreneurs. This contributed to the bank’s achievements, where it was honoured with two highly prestigious awards at the Asian Banker Excellence in Retail Financial Services International Awards 2024. The awards, presented by The Asian Banker, crowned FirstBank as both the Best SME Bank in Nigeria and the Best SME Bank in Africa, a testament to the institution’s commitment to empowering Small and Medium Enterprises (SMEs) and driving retail financial excellence across the continent.

The Asian Banker awards are widely recognized as one of the most competitive and rigorous in the global banking industry. The evaluation process is stringent, focusing on various key performance indicators, including service delivery, customer experience, financial performance, and innovation in retail banking. With an extensive panel of experts examining each institution’s track record, FirstBank’s recognition as the leading SME Bank in both Nigeria and Africa signals its outstanding leadership and vision in the African financial industry.

As the backbone of the Nigerian and African economies, SMEs play a crucial role in driving employment, innovation, and economic growth. However, they often face significant hurdles, especially in securing adequate financial support. This is where FirstBank steps in, not just as a traditional banking partner, but as an enabler and advocate for the sector.

With its range of SME-focused financial products, from deposit products, loan packages to tailored advisory services, FirstBank has distinguished itself as a leader in providing SMEs the resources they need to thrive.

The bank’s FirstSME initiative is designed to support businesses in accessing capital, managing cash flow, and navigating the complexities of business development in a competitive market. This commitment is what earned FirstBank top recognition at the Asian Banker awards.

The post FirstBank retains retail dominance by boosting businesses with RTOD product appeared first on Frontpageng.

There is no doubt that Small and Medium scale Enterprises (SMEs) are essential for rapid and sustained economic growth and development of any nation, including Nigeria, Africa and other growing countries of the world. First Bank of Nigeria Limited, the nation’s most valuable bank brand, has over the years shown commitment towards the success and growth of SMEs business in Nigeria.

The bank has severally introduced different customised products to provide solution that would grow SMEs in the country. Given that SMEs industry is the backbone of the economic development and the major contributor to employment opportunities and export growth, First Bank is committed to ensuring  the sector sustains business growth by providing all the necessary financial support needed to grow their businesses and Nigeria economy at large.

Although the SME sector is awash with various industries and business, FirstBank is always at the forefront of packaging products and service that suit their various businesses. The bank, which has been in existence for over 127 years, has been a pillar of support to businesses in Nigeria and always develop the right products to provide flexible and dependable services that would help SMEs achieve the expected growth profile in all areas of their business lines.

FirstSME Account

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

The FirstSME account, which comes in two variants – FirstSME Classic and First SME 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, 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.

Benefits to customers

FirstSME account has been beneficial to a lot of companies, especially SMEs, in terms enhancing the capacity to sustain growth. The major benefits of these accounts include; access to Temporary OverDrafts (TODs) and other facilities subject to meeting Risk Adjustment Capital (RAC) of each product; immediate enrollment on all digital platform; 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.

Other opportunities

Other available opportunities for operating FirstSME account is its connection to 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.

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 offer and upcoming events and programme.

Accessibility/criteria for opening account

The FirstSME classic account is specifically designed to support small scale enterprises to grow and scale up their business with a minimum opening and operating balance of N50,000 and turnover limit caps at N100 million with annual maintenance charge on the excess at 0.50k/mile.

The account also attracts Zero/mile annual maintenance charge subject to minimum operating balance and turnover limit.

But on the other hand, the FirstSME Deluxe account expects holders to have minimum opening and operating balance of N500,000 and N1 million respectively with zero annual maintenance charge subject to minimum operating balance and with no turnover limit caps.

FirstSME Connect’s scope of coverage

FirstBank’s SMEConnect services cover small/medium scale manufacturing firms, merchants (both suppliers, distributors), professional firms including law, consulting, audit, agricultural, Churches, Mosques and NGOs whose annual debit turnover is between N5 million and N500 million.

SMEs and FirstBank’s FirstSMEs account

The FirstBank’s FirstSME account is unique when compared with other SMEs accounts operating in the  nation’s banking industry and the bank is passionate about helping SMEs to grow on all fronts.

Another thing that makes the product stand 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.

SMEs’ importance to FirstBank

Across the globe and Nigeria in particular, SMEs are known to be responsible for the majority of new jobs created and they are crucial to Nigeria’s success in the global economy, in so many ways namely: For government, SMEs, contribute to wealth creation and generate tax revenues; in business, SMEs represent an important source of innovation and in the society, they are an important source of employment.

Furthermore, SMEs drive consumption because they operate in every sector of the economy, and they have extensive local knowledge of resources, supply patterns and purchasing trends. In the same vein, the sector constitutes an important source of local supply and service provisions to larger corporations and makes a significant contribution to the revenue profile of most financial institutions.  The SME sector stimulates growth and development within the economy.

NBS data

Available data from Nigeria Bureau of Statistics (NBS) showed that SMEs in Nigeria have contributed about 48 per cent of the national GDP in the last five years, account for 96 per cent of business and 84 per cent employment. With about 1.7 million people, the sector accounted for about 50 per cent of the industrial jobs. In other words, SMEs is one of the sectors that cannot be ignored in any given country.

These also imply that First Bank of Nigeria Limited understands what it takes to turn around the nation’s economy, knowing fully well that supporting the SMEs will bring multiple effects on individuals, society and economy in general.

The bank also has deeper understanding that providing support, loans facilities and training to SMEs through SMEConnect would not only help their business to thrive, but increase employment opportunities, reduce high rate of crime, open doors for more investments in the country and bring return on investment and increase  individual’s  ability to save.

Impacts beneficiaries/economy

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

Challenges of SMEs

Without any iota of doubt, the SMEs in the country is faced with different challenges ranging from poor capital structure, high cost of production, limited access to long term funds, poor business continuity/succession plan, weak value chain: supply, distribution, logistics, poor managerial and technical skills to lack of access to international market.

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

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

Operating FirstSME account is one step away from any form of distress, as all the  training opportunities from SMEconnect and credit facilities embedded in the account will help to revive the company and place it on the path of growth.

The post Boosting SMEs growth through FirstSME Account appeared first on Frontpageng.