Keeping of most financial transactions outside banking activities has been identified as a major challenge for property developers in the real estate sector to obtain their loan quests from financial institutions over the years.
Head of Diamond Bank’s Micro, Small Medium Enterprises (MSME) Desk, Chidinma Lawanson stated this at the Small and Medium Enterprises (SME) forum organised by Diamond Bank in Port Harcourt recently.
Using various illustrations to explain this to property developers, stakeholders and established entrepreneurs who attended the forum, Lawanson told them how much cash transaction could easily kill a business or even the owner.
The Diamond Bank’s MSME head therefore stressed the need for businesses to move away from what she called too much cash and advance to cashless operations through e- transfers.
On the issue of long term loans and starter loans, she also took times and pains to explain why most banks hardly finance business proposals for beginners noting that such proposals were hardly backed by experience.
‘Experience in your chosen business career is one of the factors considered in giving a loan, absence of which is not a plus at all. You may have big dreams and ideas but when you step in, the story may no longer be the same. The banks must demand for their payment whether the reason for the business failure is genuine or not’ she stated.
Commenting on the demand for long-term loans for real estate development with long gestation periods, Lawanson said that why banks insist on short-terms loans is because the laonable funds available to banks were also short-term deposits which were often for 90 days.
According to her the Central Bank of Nigeria (CBN) does not allow banks to lend out shareholders’ funds which should have come to banks as long term sources.
She used the occasion to disclose that the Central Bank of Nigeria proposed N500 billion to banks to boost long term loans to private sector.
In a lecture entitled “Failing to Plan” Olugbolahan Mark-George of Mark-George Consultants, stressed the need for good business plan pointing out that those who enter into businesses just because others or friends are doing it and succeeding hardly succeed.
Also in a key note address, the Chief Executive Officer (CEO) of Baldon Clothes, Adedoyin Balogun spoke on how to succeed in business in recession.