FirstBank Retains Retail Dominance With Temporary Overdraft Product

In a dynamic and often unpredictable financial landscape like Nigeria, the ability to access funds at critical moments makes all the difference. Financial agility is usually the key to unlocking growth and success for entrepreneurs.

With fluctuating prices and unexpected financial policies, many businesses have recently found themselves needing short-term financial solutions to keep their businesses running smoothly. First Bank of Nigeria Limited said it has recognised this challenge and has redesigned the Retail Temporary Overdraft (RTOD) as a lifeline to empower businesses with swift, flexible cash flow support that can significantly empower business owners, allowing them to navigate the complexities of business management with greater ease.

According to the bank, the Retail Temporary Overdraft (RTOD) aims to provide customers with flexible, temporary overdrafts to meet urgent business financial needs. It also stated that the features of RTOD include access to up to a million monthly, subject to 10% of 6 months’ credit turnover from sales; interest rates are competitive and subject to changes in money market realities; no tangible collateral is required. Facility tenor is 30 days, and this can be accessed up to 12 times in one year.

The bank also explained that this facility’s benefits include assistance in growing business volumes, which positions SMEs for higher facility limits. It added that it is helpful in emergencies to meet urgent business needs as no tangible collateral is required to get the loan, and it is available throughout the year once the existing facility is repaid within 30 days.

According to the bank, the interest rate is cheaper due to the shorter facility tenor. Some customers have been able to turn their businesses around with the help of this facility, such as Mr. Isola, the prime mover of Champion Five Limited, a food retail vendor who approached FirstBank for funding to augment his working capital and increase production. The bank said it provided an N5 million overdraft facility with a 30-day tenure, which was made available to him for 12 months. It has helped Champion Five Limited increase production by 50%, expand its customer base, and employ more staff.

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“SMEs with regular cash flow who have maintained an account with FirstBank for six [6] months or 12 months in any other commercial bank are eligible for this facility. The amount drawable on this facility is N5 million monthly, subject to 10% of the customers’ last 6 months’ credit turnover. Repayment is automatically deducted from (Sales or business proceeds) incoming receivables into the borrower’s account within the stipulated time. To apply, customers must show interest by contacting the FirstBank SME advisor or applying online by submitting the required documents. Approval could be as fast as 24 hours in cases where the customer fulfils all criteria.

“To ensure that customers can maximise given opportunities and enjoy maximum turnover, the loan figure is N5 million globally for qualified customers who show a good track record of prompt repayment and also meet the stipulated criteria. FirstBank’s Retail Temporary Overdraft product has impacted both male and female entrepreneurs’ businesses. This contributed to the bank’s achievements, where it was honoured with two highly prestigious awards at the Asian Banker Excellence in Retail Financial Services International Awards 2024. The awards, presented by The Asian Banker, crowned FirstBank as both the Best SME Bank in Nigeria and the Best SME Bank in Africa, a testament to the institution’s commitment to empowering Small and Medium Enterprises (SMEs) and driving retail financial excellence across the continent. The Asian Banker Awards are widely recognised as one of the most competitive and rigorous in the global banking industry. The stringent evaluation process focuses on key performance indicators, including service delivery, customer experience, financial performance, and innovation in retail banking. With an extensive panel of experts examining each institution’s track record, FirstBank’s recognition as the leading SME Bank in Nigeria and Africa signals its outstanding leadership and vision in the African financial industry. As the backbone of the Nigerian and African economies, SMEs play a crucial role in driving employment, innovation, and economic growth. However, they often face significant hurdles, especially in securing adequate financial support. This is where FirstBank steps in, not just as a traditional banking partner but as an enabler and advocate for the sector. With its range of SME-focused financial products, from deposit products and loan packages to tailored advisory services, FirstBank has distinguished itself as a leader in providing SMEs the resources they need to thrive. The bank’s FirstSME initiative is designed to support businesses in accessing capital, managing cash flow, and navigating the complexities of business development in a competitive market. This commitment earned FirstBank top recognition at the Asian Banker awards,” information from the bank has revealed.