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How SMEs Approach Digitization

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Friday, December 22, 2018 2.00PM / Bukola Akinyele for Proshare WebTV / Image Credit: Money Mantra

 

At the recent maiden edition of the Africa Fintech Festival in Lagos, Nigeria, panelists discussed, “How Traditional SMEs Are Approaching Digitization”. 

This was in recognition of developments and changes in the fourth industrial revolution, driven by digital technology. 

The Co-Founder/CEO of Q-Lana USA Christian Ruehma sharing his views believed that  what was important for SMEs beyond loans was the provision of financial advisory services. 

He cited the fact that in Europe, Corporate Banks have 30 to 40% or more of their market share in SMEs. Reuhma emphasized the need for SMEs to engage the services of financial advisers, which would enable them make proper financial decisions 

Mr Abiola  Ogunsakin Head, Market Development, Inlaks Nigeria said that in the banking sector, digitization of SMEs depended on the availability of Data and user interface platforms.   

Ogunsakin gave an example of the Central Bank of Nigeria (CBN) indexing guidelines where companies who are not traditional banks, will now have the opportunity to provide limited banking-related services. The challenge in Nigeria is the character or nature of the process for obtaining the license. 

According to him “SMEs can leverage digitization if they have a technical team to create the API eco system and they can equally take advantage of the ecosystem to create different new service levels”. 

traditional E-commerce companies now engage in payment solutions and become the new interface between customers and their banks” he said. 

Mr Stanley Jacobs Head, Consumer Distribution, Ecobank Nigeria said when thinking of SMEs, four (4)  aspects are critical;

  • How SMEs interact upwards with the supplier to get input and process
  • How customers access solutions that SMEs offer
  • How the payment channel works and
  • How service and products get delivered to customers
  •  

He noted that SMEs must have answers to challenges in the four (4) aforementioned areas to experience the full benefits of digitization. 

Jacobs observed that so far large corporates like fast moving consumer goods companies (FMCGs)  and a few other sectors have upgraded their digital service or product delivery channels to improve the experiential journey of customers                                                                                                                                                          

The Ecobank Nigeria Head, Consumer Distribution noted that SMEs who can’t afford to build portals, have been able to align with banks to provide the E-commerce space to sell their products or services 

In the area of payments, he described 2018 as a year for QR payments with low channel costs   

He cited a recent research that shows that, “28% of customers in the UK will choose larger companies over smaller ones because smaller companies make it hard to buy online and 36% will choose larger companies because home delivery options mad available  by larger corporates”. 

The Panelists agreed that digitization is crucial for all SMEs to scale and drive viable business operations. 

Speaking further Mr Christian Ruehmer was of the view that loan officers of banks should improve their interaction with SMEs , using digital platforms to engage and collate vital information that could improve business interface and customer delight.


 Proshare Nigeria Pvt. Ltd.


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