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Minimising financial risks in SMEs through advisory services

Photo; muscatdaily
Photo; muscatdaily

Globally, the financial services industry has been riddled with challenges, especially since the outbreak of the financial crisis in 2008. In Nigeria, the sector relapsed again with the crude oil crisis, as huge investments turned bad debts, including the advisory services that led to the decisions. Yet, amid the challenges, the sectors has come out tops as one of the five potential sectors that would initiate growth indices and eventually, bailout the nation’s economy.

Currently reeling under the challenges of debt and impairment provisioning and foreign exchange illiquidity, which were induced by falling international price of crude oil, the sector has also faltering non-interest earnings’ profile to contend with.

On the other hand, Small and Medium Enterprises sector has long had the notoriety for poor funding and associated risks both real and imagined. It has received several commentaries, with many acclaimed experts and almost every identifiable bank in the country has something to give in its behalf, even some investment bankers. It also has remained under several limitations, although some entrepreneurs in the segment are now rising above the observed constraints. Yet, SMEs are globally acclaimed to be the engine of economic growth and veritable development tool notwithstanding varying climes and the argument lies in advisory services.

According to EY report: “Access to funding remains an issue, not because there is no funding, but because there are not enough bankable projects. Many entrepreneurs don’t know what it takes to fund a business. They underestimate very often the actual amount of investment required. The second is access to markets. Many entrepreneurs don’t understand how they can access the markets beyond the local context. How they can be national and international. That is a common challenge why an entrepreneur or a small business remains local.”

Perhaps, it may be apt to say that the anticipated consequences of the above statement, informed partly or in whole, the objective of financial advisory business. “The sector where there is an advantage, which Nigeria has got, is the financial services, but it comes down to how you formalise and shape these,” the report added.

Of course, a critical look at the unbanked and the challenge of development of small business, paint a similar picture in the mind. This is the story of effective financial advisory company.

The Lagos-based Rosabon Financial Services, a player in the financial services industry, recently became Nigeria’s latest global success story in SME financing as it clinched the ‘Best SME Financial Advisory Nigeria 2015 Awards among other winners across several regions, from the UK-based Capital Finance International (CFI.co.), an international print journal and an online resource, reporting business and finance trends across the world.

The yearly award by the company seeks individuals and organisations that contribute significantly to the convergence of economies and truly add value for all stakeholders.

Rosabon Financial Services, along with two other Nigerian companies, was nominated by CFI.co audiences, and then shortlisted for further consideration by a panel. CFI.co’s research team gathered additional information to help reach a final decision coupled with some cases where senior members of nominee management team provided the judges with a personal view of what sets their companies and institutions apart from the competition.

Rosabon was declared winner in this category based on its outstanding records of financial performance, risk management, corporate governance, customer services, innovation, CSR policies, market leadership, transparency, response to market demands and strength of nominations.

This is significant because with this award, Rosabon has now joined others Nigerian corporates like Zenith Bank, Schlumberger Nigeria, CRC Credit Bureau, ARM Investment Managers and PricewaterhouseCoopers Nigeria who have won an award from CFI.co in different categories in the recent past.

The Chief Executive Officer/Managing Director, Rosabon Financial Services, Chukwuma Ochonogor, said: “The award is a great recognition that reiterates Rosabon’s commitment to economic growth and development by providing fast, easy and reliable funding and advisory services to small and medium sized enterprises, to enable them run effectively as well as expand their businesses, while creating jobs for the good of the economy.

“SMEs are major economic drivers; unfortunately, there has been a huge gap in performing this role largely due to financing as a result of the risk factor associated with them. At Rosabon Financial Services, we constantly seek to bridge this gap by providing these drivers the fuel that powers this dynamic economy of ours. So, we are indeed honoured being recognised by this world reputable finance magazine. This will only spur us to do more for SMEs.”

Also, the Head of Strategy and Marketing, Chidimma Onyeokoro, said: “We are grateful to CFI for recognizing our intent funding of Small and Medium-Sized enterprises that has helped these businesses grow over the years. This award means a lot to us and we see it as a stepping stone to creating more innovative, creative and strategic initiatives that would aid our plan of facilitating the growth of young businesses in Nigeria.”

In Nigeria, the SMEs form a critical part of the economy as they constitute over 90 per cent of the economy, according to studies by International Finance Corporation. They also represent more than 80 per cent of the manufacturing/industrial sector in terms of number of enterprises, but contribute approximately one per cent of the country’s GDP, which is a result of its many constraints, chief among which is access to funds.

It was the need to fill this gap and provide more opportunities for the SME sector that Rosabon over the past two decades waded in, providing the fuel that powers Africa’s largest economy by helping Nigeria’s SMEs find the required funds for survival and expansion.

As a leading financial, intermediary and equipment leasing company, Rosabon Financial Services, a part of the Concept Group Nigeria, closely follows international best practices to ensure its sustained growth.

The company also maintains one of the industry’s most successful client development strategies, which have seen it multiply its revenue stream by offering full suite of products, carefully crafted to fill the diverse needs of businesses across all sectors of the economy.

More so, delivering readily available financial solutions to private enterprises has allowed Rosabon Financial Services to become a top-tier player and the go-to place for entrepreneurs aspiring to reach the next level.
With a customer centric approach that has set a new industry benchmark, the company has managed to expand the scope and nature of its engagements, broadening the customer base and exploring new services and financial products.