Over 17m SMEs still struggle to access loans

…How Carbon digital bank provides lifeline

…Democratises access to credit in Nigeria

By Prince Osuagwu, Hi-Tech Editor & Juliet Umeh

The International Monetary Fund, IMF celebrates Nigeria’s informal economy for absorbing over 80 percent of the country’s workforce.

These employments are basically done by the over 17 million Small and Medium scale enterprises, SMEs littered around the country.

Besides the employments, the Nigeria Bureau of Statistics, NBS specifically confesses that SMEs in Nigeria have contributed about 48 percent of the national GDP  in the last five years. With a total number of about 17.4 million,  they account for about 50 per cent of industrial jobs and nearly 90 per cent of the manufacturing sector, in terms of number of enterprises.

Despite these significant contributions to the Nigerian economy, the SMEs are still plagued by excruciating business challenges that keep their future bleak.

Most significant among the challenges is difficult access to good funds to gain speedy traction. Other challenges include lack of skilled manpower, multiplicity of taxes, and high cost of doing business, among others.

These problems have become perennial and significantly have led to slow growth of the sector which ironically holds the fortunes of the whole country.

But there is now a lifeline. The gap between the Nigerian banking system and the SMEs in terms of loan assessment may have been bridged if a Nigerian loan and credit facility company, Carbon digital banks sticks to what it has outlined towards providing a lifeline for the informal sector.

Carbon prides itself with  providing access to financial services for all Africans with the belief that  access to credit and quality financial services is a human right. 

It believes that  empowering individuals with access to credit, simple payments solutions, high-yield investment opportunities and easy-to-use tools for personal financial management, will empower all people with the financial access they need to pursue a life of dignity and prosperity. 

Following the rigid nature of traditional sources of financing, where demand for collateral do not fit the SMEs business flow, Carbon Digital Bank has provided itself as a platform where they can take their businesses to the next level with up to ¦ 20 million uncollateralized flexible repayment loans.

Although not relatively new, after operating for 10 years, founders, Chijioke and Ngozi Dozie said what stands the platform out is innovativeness due to high level of its technology adoption.

According to the Dozies, “Before 2012, access to credit for many bank customers in Nigeria was almost a herculean task. The significant gap in the Nigerian banking system was what pushed us into founding Carbon in 2012.

“So far we have steered the idea to where we can comfortably call ourselves pioneers because most of the innovations we introduced from scratch are what the sector is awash with today. So, we are pacesetter in this business and we have a lot of firsts to our credit”.

Carbon flaunts its uniqueness with some innovations including being the first to charge less than one percent interest on Carbon Accounts, Cash-back on all debit card spend, debit card rebates on select purchases and installment payment of up to four parts with Carbon Zero on customer’s card.

Going down memory lane, Chijioke Dozie recounted that the early days of the business was not so rosy despite the fact the idea was clear and the vision, focused.

  “When we started in 2012, it was a manual business where we used agents to go door to door, selling loans. We also did manual verification where our agents have to check a customer’s data, the employment record and general physical KYC, but luckily for us, a couple of things happened in Nigeria, including the central bank of Nigeria, CBN, introducing bank verification number, which allows us verify KYC remotely; so we didn’t need to be physically present where our clients work.

“Secondly, with the Fintech  ecosystem coming to fore in 2015/16, enthroning the likes Paystack, Fluterwave and other payment processing companies, we were able to do payment remotely. Prior to that, it just had to be cheque. 

For Ngozi Dozie, “what we have brought into loans and credit facility assessment, particularly for the SMEs is that democracy that was lacking. We are the first to give customers free credit report, even today, whether customers take a loan or do other transactions, they can go to the app and check their credit report for free.

“We are the first Fintech in Nigeria if not the continent to get a credit rating from Global Credit Rating, GCR.

“Of course, recently, we were the first to give free bank account as opposed to the typical charges by traditional banks and on our platform, users buy airtime free of any charges; and if you come to think of it, there’s nowhere around the world where you can spread a payment with zero interest rate, except on Carbon Digital Bank” he contended.