FirstBank sounds slarm on loan sharks targeting small businesses

First Bank of Nigeria has advised small and micro business holders to stop sourcing funds from loan sharks to avoid stress and financial instability.

Abiodun Famuyiwa, the Group Head of Retail Business, Community Banking, and Money Transfer at First Bank, said this during its December FirstBank SMEConnect Webinar.

The event, according to a Leadership report, was titled "Pioneering SME Success: Growth Profit and Sustainability Goals."

Many businesses have suffered

As a result of the pressures and crude ways of loan sharks, Famuyiwa noted that many small and micro businesses had been thrown into turmoil.

He urged micro and small businesses not to put themselves under unnecessary financial pressure.

He said: “A lot of times while trying to raise capital to solve the problem of finance, what most SMEs do is that they get desperate when they cannot raise funds, or they cannot get family members to give them, the next thing they do is to go to these loan sharks. A lot of damage has been caused by these loan sharks because they give people interest rates that are off the roof.

“By the time you struggle to pay the interest, the capital is still waiting for you. Most businesses' profit is so marginal that they cannot cope. Please avoid expensive sources of funds like these loan sharks as they can be very damaging to businesses."

Famuyiwa noted that some SMEs had to close down business, and some even committed suicide due to pressure from loan sharks.

However, he noted that to get a low-interest loan from the bank, businesses will need to run the business correctly by ensuring their businesses are registered and keep proper financial records.

He added that SMEs will need to ensure they are disciplined enough to transact business operations through the bank so that the bank can monitor their turnover and cash flow. In addition, he said businesses need Tax Identification Numbers to work with the bank.

In a recent report, however, First Bank announced the name change of its subsidiary in several countries to align with the parent brand.

In a statement seen by Legit.ng, the bank announced that all its subsidiaries will no longer carry the "FBN" prefix followed by the country's name. Instead, they will adopt a "FirstBank" followed by the respective country's name.