By Stanley Opara

Monday, 6 Dec 2010

Oceanic Bank International Plc has said its savings deposit for microfinance, has hit N16.5bn.

Speaking to our correspondent in an interview on Friday, the Head, Development Finance of the bank, Mr. Felix Oyakhamoh, said the bank was able to raise the sum within two and a half years following the creation of the Development Finance Department at Oceanic Bank.

He said the bank had far exceeded its initial target of N1.4bn for microfinance savings deposit, with over one million customers on board.

According to him, in 2007, the bank set up a Development Finance Department to complement its Corporate Social Responsibilities initiatives, but from the angle of a social business enterprise.

He said the idea was to focus on things the bank could not have done ordinarily, but which were undertaken because they had social impacts and could pay for themselves (break even).

Oyakhamoh explained that this unit of the bank had two bottom lines, which were the social impact bottom line and the profitability bottom line.

“We look at the need to balance profitability with social impacts. We take up things that are not really profitable, but have social impacts on the larger population,” he said.

Commenting on the problems confronting Small and Medium Enterprises in Nigeria, he said SMEs in the country were an “endangered specie” because so much had been said about their plight with little or nothing being done to ameliorate it.

He said most SMEs lacked the capacity to get bank loans because they did not have what the bank needed, which in most cases, were a good track record and strong management capacity.

According to him, major factors considered in microfinancing are character and cash flow of the business applying for the facility, of which any issue with any of the factors could stop a bank from committing its funds.

Oyakhamoh explained that infrastructural challenges were seriously working against the success of SMEs in the country.

He added that many of them collected loans from banks only to invest them in providing infrastructure which ought to have been in place.

He said, ”A good percentage of the facilities most SMEs ask for would go for infrastructure provision and not for the business itself. Now, how would they break even?”

He, however, urged government to take seriously the issue of infrastructure provision especially power, adding that more of physical work should be seen in that regard.

 

Source: Punch