By Olivia Nnorom
The central role of commercial banks is to provide financial services to the general public and business, ensuring economic and social stability, and sustainable growth of the economy. They act as intermediaries between those who have surplus money and those who need money. Usually, they do this through credit creation for individuals, and support of small and large-scale enterprises. Loans are meant to provide individuals or businesses with additional money to cover their expenses and other obligations, which they then pay back with interest over an agreed period of time. This way, loans allow for growth in the overall money supply in an economy and open up competition.
In line with these roles, FirstBank, Nigeria’s premier and leading financial services provider, has devised a variety of loan products to assist individuals to fulfil their dreams as well help the growth of new businesses and SMEs, a sector that has proven to be an important contributor to employment, economic and export growth. Being woven into the fabric of the society for over 128 years, First Bank of Nigeria Limited remains at the forefront of providing the desired financial products and services to meet the needs unique to customers as well as facilitating the requisite tools and resources to efficiently and effectively drive business sustainability and expansion strategies essential to taking individuals and SMEs to the next level.
In February 2022 when FirstBank announced its partnership with CDC Group (now British International Investment), the UK Government’s development finance institution, on a $100 million finance facility to FirstBank to help support funding to women-owned and led businesses as well as to local SMEs in Nigeria, Adesola Adeduntan, managing director/CEO of FirstBank, said that enabling financial inclusion for SMEs has been a strategic priority for the bank over its 128-year history.
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“At FirstBank, we remain ever committed to fostering financial inclusion, creating wealth for the underserved, enhancing access to quality education and health care, improving lives and empowering women,” Adeduntan said.
Some of the initiatives by FirstBank to help individuals and growing businesses access useful and affordable financial products and services that meet their needs include FirstAdvance, PLAS (Personal Loan Against Salary), FirstCredit, Automobile Loans, and various loan schemes for SMEs to help operators in that all-important sector to overcome their funding challenge and play their role as engine of economic growth more meaningfully.
FirstAdvance is an automated digital lending solution designed to offer convenient and easy access to cash for payroll customers awaiting payment of their salaries. The product is meant for salary earners whose accounts are domiciled with FirstBank and have received regular salaries in the last six months or more. Maximum amount accessible is N500,000.00 subject to 50 percent of net average three months salary, whichever is lower. The eligible amount is calculated after deducting all other loan obligations to the bank, and can be accessed through FirstBank digital channels: FirstMobile and USSD. Loan disbursement happens within one minute with very competitive interest rates at 2.5 percent flat upfront collection, and does not require documentation. FirstAdvance recorded a product accessibility rate of 180,133 users, transaction volume of 580,363 and a transaction value of N13,786,739,426 in the first four months of 2022.
PLAS (Personal Loan Against Salary)
Geared towards “unlocking the wealth in salary account”, FirstBank designed the PLAS account to ensure that customers are not being charged high-interest rates or forced to submit more collateral. Salary account holders whose accounts are domiciled with FirstBank can access up to N30 million and pay back the loan over a period of up to 36 months, subject to a retirement age of 60 years and a flexible repayment plan. Applicants for this loan are required to provide documents that include application letter, personal loan application form, pay slip, statement of accounts, applicant’s letter of total emolument, confirmation of applicant’s employer on FBN’s approved list, and letter of irrevocable domiciliation of salary for the duration of the facility.
FirstBank customers whose accounts must have been operational for at least six months with a good credit record are allowed to access quick and simple loans as high as N300,000 on their mobile phones without documentation and collateral. FirstCredit has an interest rate of 10 percent flat.
To access the FirstCredit loan include, interested customers are required to dial *894#, select Loans, select FirstCredit, select Get New Loan#, select the account number with which they want to apply for the loan, grant data usage consent and accept terms and conditions. They will be presented with four loan amount options to choose their desired loan amount, and the loan is then disbursed into their account.
Under the FirstBank automobile loans, employees in paid employment can access a maximum loan amount of N15 million to acquire vehicles for the day-to-day running of their businesses and other purposes. This loan product features a maximum tenor of 48 months (four years), 20 percent equity contribution, 22 percent interest rate, salary domiciliation, and the vehicles must be new vehicles from FirstBank-approved vendors. Borrowers on this product enjoy benefits ranging from one year free car servicing or car serviced at 15,000km mileage (whichever comes first), free fuel card available for one year, free car registration, and three-year manufacturer’s car warranty. Applicants require to present application letter, auto loan application form, proforma invoice from FirstBank-approved vendors, pay slip for the last three months, statement of account, and letter of total emolument.
In August 2020, FirstBank launched the FirstSME account, a tailor-made current account with a clear value proposition aimed at harnessing the huge opportunities available in the SME sector at zero charges in Nigeria. The FirstSME account is made up of the Classic and Deluxe variants. The FirstSME Classic account is specially designed for small-scale enterprises and provides the necessary support to scale businesses with a minimum operating balance of N50,000, zero annual maintenance charge subject to minimum operating balance and turnover limit caps at N100m with annual maintenance charge on the excess at N0.50k/mile, and access Temporary Overdraft (TOD) and other facilities subject to meeting Risk Acceptance Criteria (RAC) of each product.
On the other hand, the FirstSME Deluxe account is specifically designed for medium-scale enterprises to provide the needed growth support and scale businesses with a minimum opening balance of N500,000, minimum operating balance of N1,000,000, zero annual maintenance charge subject to minimum operating balance, no turnover limit caps, customer access to TOD and any other facilities subject to meeting RAC of each product.
FirstGem was launched in 2016 specifically to meet the needs of the female aged 18 years and above and, according to FirstBank, it has been impactful in driving financial inclusion, influencing women’s empowerment through gender-advancement programmes like savings culture, financial literacy, wealth management and building an investment portfolio.
In July 2022, in furtherance of its role in promoting female entrepreneurship across the country, FirstBank announced the launch of the FirstGem fund (FirstGem loan), a single-digit loan scheme exclusively designed to put women at an advantage in contributing to the socio-economic development of the country. Designed for female-owned or partnered SMEs in the food/beverage processing and packaging, beauty and cosmetics, confectioneries, catering and restaurants, transportation (logistics) and agric/agro-allied (retail value chain) sectors, the FirstGem loan scheme comes with an interest rate of 9 percent per annum. It is a collateral-free loan available to the bank’s existing and prospective female customers who can access loans from N500,000 to N3 million based on eligibility.
At the launch of the FirstGem fund, Folake Ani-Mumuney, group head, marketing and corporate communications, First Bank of Nigeria Limited, said the bank was delighted with the role its FirstGem product plays in creating an avenue to enlarge the business activities and endeavours of female entrepreneurs across the country.
“Our FirstGem value proposition offers real solutions to constraints encountered by female entrepreneurs and working professionals, as it exposes women to opportunities for the advancement of their business. We implore every female business-minded individual to take advantage of the FirstGem loan as it puts them at an advantage to contribute their quota to the national economy,” she said.
FirstBank has continued to show commitment to providing bespoke financial and non-financial services, offerings and solutions to growing businesses through its SMEConnect project. SMEConnect was birthed out of the need to bridge the gap and connect SMEs to resources, products and services that will enable them to overcome the challenges of poor business structures, lack of infrastructure, poor market penetration, limited access to information and professional services, inconsistent government policies, amongst others.
This project encompasses a link to the seven strategic pillars including connect to infrastructure, connect to talent, capacity building, connect to policy and regulation, connect to resources, connect to market as well as connect to finance, which the bank considers essential for the sustainability and growth of SMEs. SMEs can also have access to free business advisory services through the business diagnostic tool where they can showcase their products and services at no cost at all, interact with their customers and other SMEs alike, connect to free capacity building workshops, seminars and webinars and get regular updates on policies and regulations impacting SMEs. It is also possible to request a business coach on the portal and get up to 34 percent discount. The uniqueness of the platform lies in the fact that these offerings are either free or substantially discounted.
Other loan schemes for SMEs
FirstBank has also initiated different products targeted at financing the specific needs of SMEs. Some of the funds can be used for commercial mortgage finance, petroleum distributorship finance, operational vehicle finance, contract finance, among others.