Fiducia aims to propel Nigeria’s supply chain finance

Kwame Malik

Global Courant

MSMEs are crucial to economic growth worldwide, including in Nigeria. And in Africa’s largest economy, they have long continued to serve as the lifeblood that fuels economic growth and development by creating jobs, alleviating poverty and generating wealth. The International Labor Organization (ILO) says MSMEs account for 96 percent of businesses, 84 percent of employment and contribute 48 percent of Nigeria’s national gross domestic product.

But despite this enormous economic importance, MSMEs face a plethora of challenges that limit their potential for scale. For example, they often struggle to access the necessary funding for the growth and expansion of banks and financial institutions.

Often they lack the collateral or credit history necessary to meet the requirements of financial institutions, or even if they manage to get a loan, the interest rates can be prohibitive. Nigerian banks have lent less than 1 percent of their total exposure to MSMEs, leading to a funding gap of more than 65.4 trillion Nigerians ($156.1 billion).

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It is to put an end to these longstanding problems that Fiducia, a technology-enabled supply chain finance platform, has rolled out the first solution of its kind, with a mission to catalyze the growth of Nigeria’s supply chain finance market up to NGN 12 trillion.

What is Fiducia

Fiducia is an innovative platform that connects business buyers, suppliers and financiers in a digital marketplace where invoices can be financed and traded.

By leveraging the credit profiles of their business buyers, Fiducia provides suppliers with access to the cheapest financing while preserving the liquidity of business buyers. For both corporate buyers and suppliers, Fiducia amplifies cash flow without materially impacting customer loan profiles on the balance sheet. For financiers, Fiducia provides access to a vastly expanded pool of previously overlooked companies and new high-risk suppliers seeking financing.

Fiducia is the latest venture from Trium, a business building platform focused on digital technologies that have the potential to fundamentally improve lives. Trium is part of the Coronation ecosystem known for providing transformational solutions to Africa’s unique challenges.

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LR: Roosevelt Ogbonna, MD/CEO Access Bank Plc.; Imohimi Aig-Imoukhuede, MD/CEO Fiducia; Ms. Bunmi Lawson, Chairman of the Fiducia Board of Directors; Aigboje Aig-Imoukhuede, Chairman, Coronation Group; Segun Ogbonnewo, Fiducia Board of Directors; Adebayo Adewolu, CEO, Trium Limited at the launch of Fiducia on Thursday

Equitable wealth creation and inclusive growth

At the formal launch of the platform last Thursday at the Eko Hotel & Suites, Victoria Island, Lagos, Bunmi Lawson, the MD/CEO of EDFIN Microfinance Bank Limited, stressed in her opening speech the need for Nigeria to promote equitable wealth creation as the country is entering a hopeful era of growth. And to stay competitive and relevant, companies must adapt and embrace innovation in this rapidly changing environment. And that is exactly what Fiducia aims for.

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She further stated: “By leveraging cutting-edge technology and building a community of financiers and suppliers, we offer companies the opportunity to unlock the true potential of their supply chain. With our services, companies can access instant funds, improve liquidity and fuel their growth ambitions, all while mitigating risk and minimizing administrative burdens.”

The International Finance Corporation (IFC) currently estimates the value of Nigeria’s existing supply chain finance sector at approximately NGN 3 trillion. If the country’s currently excluded SME supply chains could be brought into play, an additional NGN 9 trillion could be unlocked for Nigeria’s economy.

Supply Chain Finance (SCF) is emerging as an effective tool to close funding gaps in emerging markets. The current SCF offering only covers about 24% of the potential market. MSMEs are estimated to generate more than half of SCF opportunities, according to the IFC.

Commenting on the launch, Fiducia’s Chief Executive Officer, Imohimi Aig-Imoukhuede, revealed that Fiducia was a game-changer for smaller businesses and medium-sized companies as they historically wasted resources on complex, time-consuming funding application processes that rarely deliver desired results .

“Fiducia was founded with the express purpose of leveling the playing field for entrepreneurs in Africa by unlocking the value of their supply chains. Today, Fiducia is successfully driving inclusive GDP growth by broadening financial inclusion – as a larger pool of small and medium-sized businesses enter Africa’s financial markets at the same terms and rates previously available only to large companies. Fiducia’s financial services and finance partner ecosystem includes many of Africa’s top development finance institutions, equally committed to solving Africa’s supply chain finance challenges.”

Aig-Imoukhuede assured partners and stakeholders of strict adherence to both Nigerian and global best practices, including data privacy and security, backed by an effective legal framework as a sign of commitment to trust, as reflected in the company’s name.

Fiducia aims to propel Nigeria’s supply chain finance

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