FirstBank boosts SME growth with revamped temporary overdraft facility

FirstBank boosts SME growth with revamped temporary overdraft facility

By Tosin Ajayi

In an era where business survival often hinges on quick financial support, First Bank of Nigeria Limited has reaffirmed its position as Nigeria’s retail banking leader through its strengthened support for Small and Medium Enterprises (SMEs). The bank’s Retail Temporary Overdraft (RTOD) product has emerged as a vital financial solution for entrepreneurs needing swift access to funds to manage urgent business needs.

Redesigned to offer greater flexibility and ease, the RTOD facility enables business owners to access up to N5 million monthly, subject to 10% of their six-month credit turnover from sales. With a tenor of 30 days and eligibility to access it up to 12 times a year, this facility is tailored to provide working capital support to businesses facing short-term liquidity constraints.

One of the major benefits of the RTOD is that it requires no tangible collateral, and interest rates are competitive, subject to prevailing money market conditions. Repayments are seamlessly deducted from incoming business proceeds, making the facility both convenient and sustainable for businesses with steady cash flows.

Eligible SMEs must have operated an account with FirstBank for a minimum of six months or provide a satisfactory banking history from another commercial bank for 12 months. Customers can apply either through a FirstBank SME advisor or online, with approvals processed in as little as 24 hours, provided all requirements are met.

The impact of the RTOD on small businesses is significant. Take the case of Champion Five Limited, a food retail company led by Mr. Isola, which accessed the overdraft facility to scale up production. With a N5 million boost, the business expanded operations by 50%, grew its customer base, and increased its workforce.

FirstBank’s commitment to empowering SMEs has not gone unnoticed. The bank was recently honored at the Asian Banker Excellence in Retail Financial Services International Awards 2024, clinching the titles of Best SME Bank in Nigeria and Best SME Bank in Africa. These accolades recognize FirstBank’s outstanding service delivery, innovation in retail banking, and unwavering support for small businesses.

The awards, among the most competitive in the global banking industry, are judged based on stringent criteria including customer experience, financial performance, and product innovation. FirstBank’s recognition underscores its strategic role in driving SME growth across Africa.

SMEs are widely acknowledged as the backbone of Nigeria’s economy, yet they continue to face challenges in accessing funding. FirstBank’s proactive approach — through products like the RTOD and the broader FirstSME initiative — helps to bridge this gap. These efforts support entrepreneurs in managing cash flow, accessing capital, and navigating business complexities in an increasingly competitive market.

As FirstBank continues to expand its suite of SME-focused financial services, it remains a steadfast ally to businesses striving for sustainability and growth. Through innovative products and customer-centric solutions, the bank is helping to unlock the full potential of Nigeria’s entrepreneurial ecosystem.