Mr.
Davidson-Regha
In
Business, Finance, Interview, News by Tony ChinonsoComments Shares Mr. Davidson
Regha is General Manager and Divisional Head, Retail & SME Banking,
Heritage Bank Limited. He is responsible for providing the strategic thrust of
the Retail and SME Division with reporting responsibilities to the Group
Managing Director/CEO. He was seconded to Enterprise Bank Limited in November
2014 after its acquisition by Heritage Banking Company Limited as Acting
Executive Director to oversee the business of Lagos and Corporate Banking
Divisions.
Heritage Bank has expressed a strong commitment to Small and Medium
Scale Enterprises (SMEs), what is the rationale for this?
Our
corporate strategy and the vision of the bank states that we want to build and
transfer wealth across generations. The SMEs are part of that strategy. If you
focus on the SMEs, it means you have to meet with entrepreneurs at the
incubation stage of their business. And if you are to help them grow and become
very big and successful, that means you will be able to transfer wealth from
one generation to the other.
What do you do differently as a bank to make the SMEs successful?
What we
do is to help them put a structure in place. To this end, we provide advisory
service and equally mentor them. For us at Heritage Bank, we have discovered
that the greatest challenge the SMEs are facing in Nigeria is not just lack of
proper funding or capital; it is lack of structures. We try to de-risk them and
put structures in place for them. If there is no structure, you will see a man
who has done business for ten years and if he is not there anymore, the
business dies. As a matter of fact, we de-risk these businesses by taking away
the human wastes that exist in their environment, which ensures that the business
runs with or without the owner.
A lot of SMEs are in the informal sector without proper business
structures; how do you manage them?
According to the National Bureau of Statistics
(NBS), the SMEs contribute about 48 per cent to our national Gross Domestic
Products (GDP). What that means is that they contribute about 48 per cent of
the total labour force in the country. Therefore, they are a critical sector of
the economy and I believe that every institution, from banks to government
should focus on this sector because it is the engine of our economic growth.
But in Nigeria, banks are reluctant to lend to SMEs, why then are you focusing
on them? It may not be totally right to say that banks do not lend to SMEs,
because as far as we are concerned, the business of banks is to manage risks.
But if you say dealing with the SME sector is very risky, which is why a lot of
institutions are very apprehensive, I would agree with you, but like I said,
banks are set up to manage the SMEs to reduce their risks and make them good
and successful ventures.
How many SMEs has Heritage Bank assisted and in what ways?
We have
what we call SME Clinic, which is like a laboratory. What we do here is that
from time to time, we invite the SMEs to the clinic and put them through basic
business training and strategies like book keeping, account keeping and how to
put structures in place to separate the business and create functional units
and establish proper division of labour that will help the business. We have
even moved this further to other segments of the economy. The NYSC graduate
Scheme for example, is another platform we are using to create gainful
employment.
Why should a graduate finish his/her NYSC programme and wait for the
government to give him/her employment?
Government
has no business creating employment. The private sector should actually create
jobs for the unemployed. So, what we are saying as a bank is that, develop
entrepreneurial skills within people and provide support for them. That way,
youth unemployment in Nigeria will be dealt with. And we have many successful
stories. There is a gentleman that we supported to set up his clothing
business. When he came to us, he asked for a loan of ten million naira. Today,
the guy does a turnover of over fifty million naira a month. In Abuja and Port
Harcourt, we have provided the same services to SMEs. And to take this further,
the bank has identified with various entrepreneurial schemes. One of them is
the Next Titans programme.
What is this about?
It is a
reality television programme the bank has partnered in the last three years. It
is a reality show that discovers young entrepreneurs at very early stage. It is
a partnership that make it possible for the bank to provide support for the
overall winner of the programme set up not just in terms of finance, but
structures in terms of business plans and others areas to nurture the business
to success.
What are the problems you have identified among the SMEs you have worked
with so far?
One major
problem with young entrepreneurs is that sometimes they come up with a business
idea, but as a bank, we say coming up with a business idea might not be the
right solution to it. Whatever business idea you are pushing must be end to
end. You want to produce or manufacture something; there must be a ready market
for it. This is lacking in many business plans of many SMEs. So, at our clinic,
we harness all these together and help them look for market where they can
actually sell their products to create value for themselves and society. The macro
environment does not actually support the SMEs in Nigeria and so, the mortality
rate is high.
How is your bank reacting to this?
You are absolutely correct, because from the
business school, they tell us that the average life span of a typical SME is five
years. What it means is that any SME that survives the fifth year has a strong
propensity to succeed. But because of the structures we have put in place, we
do not experience this high mortality with our own SMEs as a bank. What we do
is that we assist you with financing, support you with structures; and
periodically organise training sessions that keeps refreshing them with ideas
of business sustainability.
Are you now saying that all the SMEs you have nurtured have succeeded?
What has
happened is that every business goes through some form of challenges and cannot
be separated from its environment. You earlier mentioned the macro environment.
Therefore, a business might be going through a challenge not because the owner
does not know what to do, it might be as a result of introduction of certain
government policy. What we do when we have such a challenge is sit down with
the customer and see how best we can assist the business wade through the
storm.
With the SMEs as your focus, what do you think is the role of SMEs in
the drive for economic diversification?
The role
of SMEs is very critical for economic growth. For many of the developed
economies we see today, they all have SMEs as the support base of their big
corporations, whether in America, Europe, Latin America or Asia. For us at
Heritage Bank, we believe that is the way to go as a country. If we do not
support the SMEs, the economic growth we are all talking about will not happen.
We should see the SMEs as the catalyst to change and economic growth the
government is talking about.
What exactly is the idea behind the Heritage Man/ Have a Nice Day
Campaign?
The
Heritage Man is actually a campaign called Have a Nice Day. The Heritage Man is
a projection of a unique character to our customers who will eventually have a
unique experience whenever they encounter the Heritage Man. The ‘Have a Nice
Day’ Campaign is an experiential marketing / publicity campaign cantered around
the enigmatic character. The Heritage Man is a tall masculine character,
dressed in a green suit, green bowler hat, white shirt and a grey bow tie. He
also moves around town in a green salon car stopping at vintage points like
shopping malls, restaurants, bus stops, cinemas, cafeteria and even hospitals
to pay peoples bills with the words: Have a Nice Day, from Heritage Bank – your
timeless wealth partner. It is actually a marketing trade activity that we have
projected for the customers to have some forms of affinity with our brand. It
is meant to generate some kind of emotional attraction for our brand.
That in
summary is the idea behind it. And coming from the acquisition of Enterprise
Bank, it is a way of telling the consumers that they have an institution that
cares. It has a Corporate Social Responsibility (CSR) slant. What the Heritage
Man does is that he goes around and pay people’s bills; and after the
encounter, he says ‘Have a Nice Day’. He has visited hospitals, schools and
shopping malls. He has also visited some SME centres to support them in one way
or the other. Having flagged it off in Lagos, Heritage Man has moved to Abuja
from where it will also move to Port Harcourt.
Why is the campaign restricted to Lagos, Abuja and Port Harcourt?
The reason is that these three cities are the
three main centres of Nigeria’s economy. As a bank, we also operate three
directorates in the country.
Can you give an insight about this Graduate Entrepreurship programme by
your bank?
It is
actually a scheme for the NYSC for which we have earmarked N200 million naira
to assist Nigerian graduates with brilliant business ideas. We have set up
centres all over the country to drive this scheme. The beneficiaries emerge
from a competition that is organised for people at that level and the person or
group of persons with the most brilliant ideas get funding from Heritage Bank.
How is Heritage Bank penetrating the unbanked segment of the society?
We are using our agency banking to reach out
to them. The agency banking is a project that the Central Bank of Nigeria (CBN)
actually conceptualised to bring the financially excluded segment into the
banking system. We have set up our agency network and we are using technology.
We are also looking at about 2000 agents before the end of the year and we are
targeting rural areas, where customers can deposit money, withdraw money buy
airtime, pay bills among others.
Can you also shed more light on your retail banking approach?
As a
retail bank, our focus is on four segments; the mass market, the mass outline,
the emerging middle class who will eventually come from the SMEs and the SMEs.
Our approach is different as a bank. We are looking at customer’s life styles
using behavioural and psychological approaches to see how we can fine tune our
processes to see that our customers derive value from our products. That is what
we call ethnography.
How is the bank sustaining the customer relationship in the face of
stiff competition in the sector?
It is
service, because we pride ourselves as a service oriented bank
Vanguard Business: By Omoh Gabriel
Vanguard Business: By Omoh Gabriel
No comments:
Post a Comment