SMEs need infrastructure beyond financing – Senior VP, FCMB

Nigeria’s small and medium-sized enterprises need more than access to finance to thrive, according to FCMB’s Senior Vice President and Divisional Head of Business Banking, George Ogbonnaya, who highlights infrastructure, skills and digital transformation as critical growth drivers, in this interview with OKECHUKWU NNODIM

Beyond financing, what additional support do Nigerian businesses need to scale sustainably?

Infrastructure remains one of the most significant challenges. Reliable electricity, efficient logistics networks, and strong digital infrastructure are critical for competitiveness. Energy is particularly important because of its direct impact on operating costs. This is one reason we have invested significantly in renewable energy financing. By helping businesses access alternative energy solutions, we can reduce costs and improve profitability.

Logistics is another major issue. The cost and complexity of moving goods within Africa remain significant barriers to trade and growth. Improving logistics infrastructure would have a substantial positive impact on businesses. Digital infrastructure is equally important. Technology has become a key driver of competitiveness, and businesses need affordable access to digital tools and services. Skills development is another area that requires attention. Entrepreneurs need management capabilities, leadership skills and specialised expertise to scale successfully. Many business owners begin as sole operators but eventually need to build systems, manage teams and implement growth strategies.

Capacity building plays a crucial role in facilitating that transition. Market access is also important. Businesses need support in reaching customers and expanding demand. Mechanisms that connect producers to larger markets can significantly enhance growth opportunities. Finally, simplifying regulatory processes would benefit SMEs considerably. Many small businesses operate with limited resources and cannot maintain dedicated compliance departments. Reducing administrative complexity would improve ease of doing business and allow entrepreneurs to focus more on growth.

Nigeria’s business environment has remained challenging, with high inflation, elevated interest rates and rising operating costs. How is FCMB helping businesses navigate these conditions?

Before answering that question directly, it is important to explain why FCMB does what it does. FCMB has a rich heritage as the first indigenous Nigerian bank. Historically, the institution played a significant role in Nigeria’s economic development, including supporting indigenous participation in the ownership of companies during the indigenisation era. That history continues to shape how we approach business today. At the heart of our operations is a commitment to fostering sustainable growth in the communities we serve. Our purpose goes beyond providing financial services. We are passionate about helping businesses become more competitive, grow into stronger enterprises and ultimately contribute to national development.

That philosophy influences how we support SMEs and other businesses, especially during difficult economic periods. Today, businesses are operating in a very challenging environment. Inflation remains high, interest rates are elevated, and the cost of production has increased significantly. The pressure on businesses is substantial. Energy costs, in particular, have become a major concern. Recently, the leadership of a small business association noted that energy expenses now account for approximately 60 per cent of operating costs for many SMEs, compared with around 40 per cent previously. When costs rise at that pace, businesses inevitably face significant pressure on profitability and sustainability.

At FCMB, one of our key strengths is our long-term relationship approach. We do not view our relationship with customers as transactional. We see ourselves as partners in their growth journey. That means that when economic shocks occur, we do not simply withdraw support. Instead, we work with customers to understand their challenges and identify practical ways to help them remain competitive. Nigeria has experienced several difficult economic periods over the years, including recessions and significant market disruptions. Through those periods, we continued to support businesses and adapt our offerings to meet evolving needs.

Are there other aspects you would wish to speak about?

Another important aspect of our strategy is recognising that every business is different. While many SMEs cite access to finance as their biggest challenge, we often see financing constraints as symptoms of deeper issues. Some businesses struggle to obtain loans because they lack the documentation required by traditional lending models. Others have viable operations but cannot meet certain formal requirements. For those businesses, we leverage alternative data and digital lending models to improve access to finance.

For another category of businesses, the issue is affordability. They may qualify for loans but find prevailing interest rates too expensive. To address that challenge, we actively seek funding from development finance institutions and international partners. These arrangements enable us to provide more affordable financing options to eligible businesses. We also make extensive use of risk-sharing mechanisms that allow us to support businesses that may not have sufficient collateral. Over the years, we have used these structures to provide financing to underserved SMEs that would otherwise have struggled to access credit. The key point is that our financing approach is not one-size-fits-all. We tailor solutions to the specific circumstances and needs of each customer.

Beyond financing, what other support does FCMB provide to SMEs?

Beyond financing, we focus strongly on digital enablement, business development, and capacity building. One of the realities of today’s business environment is that efficiency has become increasingly important. As costs continue to rise, businesses must find ways to improve productivity and optimise operations. To support this, we recently introduced FCMB Collect, a solution designed to help businesses manage collections, payments, and inventory from a single platform. The objective is to provide greater visibility into cash flow and improve operational efficiency. When businesses have better control over their cash flow and inventory, they can make more informed decisions and operate more competitively.