Small, Medium Scale and Big Enterprises And Heritage Bank.

Small, Medium Scale and Big Enterprises And Heritage Bank.

Sunday, August 4, 2019 6:47 pm

Ifie Sekibo, MD, Heritage Bank

By Doyin Dare

There has always been this talk about Nigeria reviving its real sector to boost the balance of payment situation, after the poorly conceived Structural Adjustment Programme of Nigeria’s military regimes sent the economy plummeting disastrously down the cliff. This renaissance is not driven by wishful thinking. It is powered by men, infrastructure, creativity, big ideas and, by extension, institutions that provide financial foundation for new businesses, oxygen to revive those that are dead and a shot in the arm for others that are on life support. Among such organizations, Heritage Bank occupies a front row seat in Nigeria. 

Heritage Bank Plc (HB Plc, for short), often referred to as Heritage Bank or simply HB, is a financial services institution, one of the commercial banks licensed by the Central Bank of Nigeria, the country’s banking regulator, with a National Operating License, that offers Retail Banking, Corporate Banking, Online/Internet Banking, Investment Banking and Asset Management Services. With its head office situated at 292B Ajose Adeogun Street, Victoria Island, Lagos, Lagos State, Nigeria, it has its tentacles all over Nigeria. 

Right now in Nigeria, there is a rush by business owners (small, medium and large scale) to Heritage Bank the way bees swarm on nectar. What is actually the reason for this? An analyst argued that it decided to fill the vacuum left by Diamond Bank, which developed a lot of products for Small and Medium Scale Enterprises (SMEs), before it was acquired by Access Bank PLC in December 2018. In fact, on 1 April 2019, Diamond Bank was fully merged with Access Bank to build a new entity while retaining the name of Access Bank.

Heritage Bank

Another reason is that Heritage Bank made up its mind, ab initio, to help build, revive and support businesses. In July 2015, Ifie Sekibo  its Managing Director/CEO told The Nation: “Heritage Bank’s philosophy is to create, preserve and transfer wealth across generations. We are in the business to provide service per excellence and to grow with our customers. We are here to help our customers create wealth for themselves, assist our partners preserve their wealth and guide them in transferring it to the next generation. We have specialized products that enjoy zero commission on turnover charges and high interest yields, amongst others for our partners. These products help us in supporting our customers’ businesses and taking them to greater heights.”

True! In recent times, Heritage Bank was one of the major financiers of Golden Guinea Brewery, which, for 16 years, was virtually dead. Heritage Bank, Nigeria Export and Import Bank (NEXIM) and the Bank of Industry synergized to resurrect it. Anyone in his 60s is bound to remember with nostalgia that Golden Guinea Brewery was one of the major achievements of Dr Michael Okpara, Governor of Eastern Nigeria, who established it in 1962. The company went under in 2001 when its boiler exploded.

The three banks (including Heritage, of course) injected $10m life line into the company. Acting managing director of NEXIM, Bashir Wali, said during the oversight visit of members of the House of Representatives Committee on Banking and Currency to the brewery in May 2017 that NEXIM was motivated to extend the loan facility to Golden Guinea because of its profitability due to the high demand for beer as beverage as well as the huge potential of the brewery to create jobs when it resumes production. Wali, according to Thisday, said that NEXIM was acting in tandem with government’s policy to revive moribund industries, adding that the positive impact of resuscitating the brewery would be felt not only in the local environment but in the country as a whole.

Enterprises that have benefitted from Heritage’s assistance are: Vera Karris Accessories, Infusion Cakes, Niuma Boutique & Accessories, David Wej Global Ventures, makers of quality shoes; De-Vine, makers of fresh juice; Heart Affairs and Africanna Accessories, among others.

Apart from access to finance made easy for them, many enterprises have also benefitted immensely from the exposure given to them through the innovative Heritage Bank Plc’s “Sunday Small Market.” This is a market that brings together the bank’s Micro, Small and Medium Scale Enterprises’ (MSME) in the country to display their wares and crafts, which are locally made, and linking them with their customers.

The maiden edition of the market opened in Lagos early last year and the bank has kept its promise to rotate the market to different parts of the commercial city of Lagos. There are plans by the bank to make this service available to other commercial cities in the country. The Sunday Market is part of the several initiatives of Heritage Bank to bring visibility to its customers and provide a platform for the SME customers to showcase their products as well as interface with their existing customers and prospective ones.

Heritage Bank does not restrict its activities to existing businesses or relationships with established business moguls (though it offers trainings to experienced people) alone. It believes in development of skills and manpower. Some examples will suffice.

There is the Next Titan, Nigerian entrepreneurial reality show, the first season of which premiered in 2013. Usually, 16 contestants are picked after regional auditions to undergo business tasks as teams and individuals together for 10 weeks. Least performing teams and individuals are open for elimination. The cash price has been N5 million naira since its debut. As published on the bank’s website, it believes that banking is not only about how much money can be made from customers; but also, about adding value to aspiring individuals, groups, community and state.

The Next Titan is an outstanding entrepreneurial scheme that has stood out in the past years and has immensely contributed to employment generation in Nigeria; a nation where graduates and other youth endlessly scout for job opportunities. He said the program easily aligns with the primary focus of the management of Heritage Bank to promote every laudable entrepreneurial idea meant to broaden the economic horizon of the country for the benefit of citizens and other residents of Nigeria.

As part of its ways of promoting entrepreneurs, the bank, in October 2014, held a two-day Business Exhibition at the Heritage Bank Training Centre, on Adetokunbo Ademola Street, Victoria Island. It was, according to the bank, meant to support the growth of Small and Medium Enterprises (SMEs) in the country. 

That year, Heritage Bank made possible some value-added offerings to participating organizations: business clinic, funfair, networking, MasterCard utilization and opportunity for non-card holders to open their accounts. Google and Microsoft were on hand to guide business owners on how to take their businesses to the higher levels.

In all the above, the multiplier effect is employment generation. In other words, if businesses have money through banks (like Heritage); they can expand and employ the jobless. Even young graduates with start-up funds can decide not to seek employment, but to be job creators. This is to say that Heritage Bank is among the financial institutions helping to reduce the army of the unemployed whose hands could otherwise have been the devil’s workshop for crimes.   

One other area that Heritage Bank is affecting the lives of the people is that it does not fail to explain the economic policies of government to the public in order to make those in the sectors key into them, grow and provide a platform for assistance from the bank.  One of such explanations was offered by the Managing Director/CEO, Sekibo,who admits that the Nigerian government has, indeed, done a lot in the agricultural sector. The government has, in his words, carried out various transformation agenda like Nigerian Incentive-Based Risk Sharing Agricultural Lending (NIRSAL) – a new innovative mechanism targeted at de-risking lending to the agricultural sector. It is also designed to provide the singular transformational and one bullet solution to break the seeming jinx in Nigeria’s agricultural lending and development.

He further said there is also the Growth Enhancement Support Scheme (GESS) which represents a policy and pragmatic shift within the existing Fertilizer Market Stabilization Programme. It provides series of incentives to encourage the critical actors in the fertilizer value chain to work together in order to improve productivity, household food security and income of the farmer.

There is also the Staple Crops Processing Zones which involves the establishment of commodity marketing corporations around each of the agricultural commodities. There is also the Central Bank of Nigeria’s single digit loans which also caters for Small and Medium Enterprises in the agricultural sector. I believe all the government needs to do more is simply communicate more on what it is doing in the sector.

Also, the bank has a way of selling Nigeria to the international community, a disposition that can help attract global investments. For example, Sekibo recently called for stronger partnership between Nigeria and Russia for technological and infrastructural development. He made the call at the sidelines of the just concluded 2019 Annual Meetings of the African Export-Import Bank (Afreximbank) in Moscow, Russia, noting that Africa and Nigeria in particular have a lot to learn from the Russian Federation. 

In his words:  “If we carefully listen to the Minister of Foreign Affairs of the Russian Federation, Sergey Lavrov, he said the Russian investment in Africa had increased over the years to almost $20 billion in 2018. This clearly shows Africa and Nigeria especially need to key into these investments and get the best out of it. What we are seeing in Russia today is a testimony that they are giants in several areas of development and Nigeria has a lot to learn and gain and learn from them. Today Nigeria suffers from huge infrastructural deficit and a lot could be achieved from other countries of the world including Russia.

  “Russia is advanced in technology and in mining and I feel such cooperation with them will help Nigeria harness its mineral resources. We have huge mineral resources deposit in a lot of states in Nigeria and we can tap from the wealth of experience of Russia either in training of geologists or mining practices”. 

Also speaking on the importance of Nigeria being part of African Free Trade Area Agreement, AFCFTA, Sekibo, according to a newspaper report, said it is important for Nigeria to quickly join forces with other African countries on this agreement being the biggest economy in Africa.

He put it this way: “Nigeria today is seen as the Big Brother when it comes to the economy and African trade and we cannot shy away from such agreement. Such agreements give access to big markets and improved competitions among the member countries. I feel strongly that Nigeria has a lot to gain if AFCFTA is signed. I also believe if it is properly leveraged on, it will do us better as a nation.”

 Having achieved all the above, what are those factors that make the bank “tick” and able to cope with competition in the banking sector? Sekibo, the MD explained: “We provide innovative services. To us, innovation isn’t only about creating something new, it is also about taking something that exists and transforming it into something bigger and better. As a new entrant to the banking sector, our edge is that we are starting from where our competitors stopped while being able to avoid all the mistakes they made along the way. Having imbibed a culture of continuous innovation, I am confident of Heritage Bank’s ability to adapt to envisaged customer and sector changes.”

Not a bank to rest on its oars, but in the habit of breaking new grounds, the bank’s MD Sekibo, explained: “Our plans for Heritage Bank are unfolding. It is a gradual process. With the acquisition of Enterprise Bank Limited, Heritage Bank is now a bigger and better bank. One of our major strategies is to work with our partners to grow their business and take them to the stock market. As a service organization in the business of banking, we must be in the stock market ourselves for us to achieve this feat. That is our direction.”

And for the success of the MD himself, he told The Nation newspaper that his tools for success are people and good processes, most importantly, people, because people drive the processes. He added: “I believe that success is largely hinged on people who have been able to key into my vision, believing in such vision and turning it into a common goal. They are people who invested their time, efforts, ideas and energy in the business. They are people equipped with good business processes, and benefiting from lasting support from partnerships built over time.”

Heritage Bank has come a long way. In 2012, the core investor, IEI Plc, through IEI Investments Limited, acquired the Societe Generale Bank of Nigeria (SGBN) license from the Central Bank of Nigeria (CBN). Having fulfilled all required criteria, the bank returned 100% of existing SGBN account holders’ money to their owners. Heritage Bank Plc is a large financial services provider in Nigeria. Currently licensed as a national bank, it offers banking and financial services in the country, including the South, West, Southeast and the North. Its shareholders’ equity is worth at least US$88 million (NGN:25 billion), the minimum capital requirement by the Central Bank of Nigeria (CBN), for national banks.

The bank traces its roots to the late 1970s, when it was founded as Societe Generale Bank (Nigeria) (SGBN), by the late Dr. Olusola Saraki. In January 2006, the Central Bank closed down SGBN on account of failure to meet new minimum capital requirements of US$155 million (NGN:25 billion) for a National Bank. SGBN successfully challenged the closure in court. In December 2012, CBN re-issued SGBN’s banking license, but as a regional bank. Having acquired the banking license, the new ownership re-branded the bank as Heritage Banking Company Limited and opened for business under the new name on 4 March 2013.

In October 2014, Heritage Banking Company Ltd successfully met the requirements of the Asset Management Corporation of Nigeria (AMCON) and the Central Bank of Nigeria (CBN) toward owning 100% shares in Enterprise Bank Ltd. On 27 January 2015, AMCON officially transferred ownership of Enterprise Bank Ltd to Heritage Bank Plc.

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