Challenge
Access to finance for micro, small and medium-sized enterprises (MSMEs) remains a key issue in Nigeria. It is especially challenging for women and youth entrepreneurs to obtain financing. There are also many MSMEs in Nigeria that have been hit hard by the COVID-19 pandemic and need financing to continue to operate.
Solution
With funding from Dutch entrepreneurial development bank, FMO, the Frankfurt School of Finance and Management supported Access Bank, a Nigerian bank with a large MSME lending portfolio, to better reach and provide financing to women and youth entrepreneurs and MSMEs that were affected by the COVID-19-affected pandemic. This included helping Access Bank design and improve financial products aimed at these underserved groups and providing financial education, business development support, networking opportunities, and other non-financial services to these entrepreneurs to help facilitate their enterprise’s financial success.
As a part of FMO’s commitment to stimulating lending to underserved entrepreneurs, FMO guaranteed up to 95 percent of Access Bank’s MSME lending portfolio through FMO’s Nasira Risk Sharing Facility. This means that if youth entrepreneurs, women, or COVID-affected MSME borrowers default on their loans, FMO will cover 95 percent of losses.
Making Cents International supported Frankfurt School by conducting a baseline assessment of the financial needs of youth entrepreneurs in Nigeria and identifying business opportunities for Access Bank to reach youth with new products and services. Based on the results of the assessment, we supported the bank in designing, piloting, and rolling out new loan products and non-financial services for young entrepreneurs. Making Cents also assisted in pinpointing areas in which Access Bank staff needed additional training and support to better serve youth clientele.