CEM REPORT, MSME| Small and medium-sized enterprises (SMEs) are the backbone of the Nigerian economy, but access to finance has long been a major hurdle for their growth. To address this challenge, the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has partnered with Sterling Bank Plc. to launch a groundbreaking initiative called Databanc.
Databanc is a ₦5 billion initiative designed to provide much-needed financial support to nano, micro, small, and medium enterprises (NMSMEs) in Nigeria. Launched under the theme “Building with Data: Promoting Economic Growth through Data-Driven Insights,” the initiative aims to unlock a new era of financial inclusion for Nigerian entrepreneurs.
According to Bunmi Kole-Dawodu, SMEDAN’s Lagos State Manager, Databanc goes beyond just offering loans. It’s a comprehensive funding tool that provides localized support to small businesses.
“This platform would provide accurate data on nano, micro and small businesses in Nigeria while facilitating the requisite business support for these businesses,” he explained.
Databanc not only helps bridge the financial gap but also aims to enhance market access and equip entrepreneurs with the necessary resources to thrive.
The initiative also recognizes the significant role of nano-enterprises in boosting Nigeria’s export potential. By providing accurate data on these small businesses, Databanc can empower policymakers to make informed decisions that foster growth and sustainability in this crucial sector.
Long-Standing Challenge of Access to Finance
SMEDAN Director General, Charles Odii, highlighted the historical challenges faced by SMEs in accessing financial interventions. “One thing we have observed is that businesses are not responding or taking advantage of the various interventions out there for them,” he stated. Databanc seeks to change this dynamic by creating a user-friendly platform that streamlines the loan application process.
Odii further emphasized the importance of data in making informed economic decisions to strengthen the small business ecosystem. Databanc serves a dual purpose: providing financial resources and fostering data-driven insights for policymakers. This comprehensive approach has the potential to create a more supportive environment for Nigerian entrepreneurs.
Databanc Loan Process and Business Support
Bolanle Tyson, Head of SME Products at Sterling Bank Plc., shed light on the specific loan offerings available through Databanc. The initiative provides single-digit interest rate loans ranging from ₦250,000 to ₦2,500,000 for a one-year period. Databanc also caters to nano and micro-businesses, a segment often overlooked by traditional lenders.
The platform itself is designed for ease of use. Businesses with a tax identification number and registration with the Corporate Affairs Commission can apply for loans without human intervention. “The platform has a unique promoter ID, unique business ID generated for each business owner with seamless onboarding experience,” explained Tyson. This streamlined process eliminates unnecessary steps and allows entrepreneurs to focus on running their businesses.
Databanc goes beyond just providing capital. The platform utilizes unique identifiers to ensure accurate business data collection, promoting data integrity. This, in turn, allows for the creation of targeted business development and support initiatives tailored to the specific needs of each entrepreneur. As Tyson aptly stated, “It makes it easier to track businesses and provide creative solutions to foster business growth and sustainability.”
Read Also: SMEDAN, Sterling to Develop SMEs Database
What Databanc Offers Nigerian Entrepreneurs for Success
The launch of the Databanc initiative marks a significant step forward in supporting Nigerian SMEs. By providing access to affordable financing, fostering data-driven decision-making, and offering business development support, Databanc empowers entrepreneurs to unlock their full potential and contribute to the nation’s economic growth.
The success of the initiative hinges on collaboration between various stakeholders. As Kole-Dawodu pointed out, “It is important to have the support of business membership organisations to help encourage members to go on the platform and register.” Collaboration between SMEDAN, Sterling Bank, business associations, and the entrepreneurs themselves is crucial to ensure the Databanc initiative reaches its full potential and empowers a new generation of successful Nigerian businesses.
