Diamond Bank Conditions For Lending To SMEs
DIAMOND Bank Plc has given insight into one of the requirements commercial banks consider before granting loan to Small and Medium Enterprises (SMEs) in the country. Njideka Esomeju, Head Emerging Market, Diamond Bank Plc, gave the insight in her presentation on ‘Growth Financing for SMEs,’ delivered recently at the Vconnect and Facebook SME conference in Lagos. She said: “I found out that so many business operators dwells so much on cash flow. I don’t think cash flow is the challenge for SMEs; rather it is your cash cycle that is a challenge. Cash cycle is that your banker wants to know how you would turn N5 to N50; what you are going to do, your production cost, how you are going to sell, the market you are going to sell and at the end of the day, you make N50; you can give your banker N2 for debt servicing. So you need to understand your cash cycle. Cash cycle is not the same as cash flow that an accountant prepares for you. You should be able to explain that cash cycle to your...