ProvidusUnity Bank has called for financing arrangements that better reflect the long-term growth plans of small and medium-sized enterprises (SMEs), citing a persistent gap between businesses’ funding requirements and the predominantly short-term financing available to them.

The bank’s Head of Strategy, Ernest Elue, made the call during the second edition of the Go Local Summit, organised by BusinessDay Media in partnership with ProvidusUnity Bank in Lagos.

Themed “From Market Power to Market Systems,” the summit brought together manufacturers, business leaders, policymakers and other stakeholders to examine ways to strengthen local production, enhance competitiveness and develop sustainable enterprises.

The event also included exhibitions of locally manufactured products and discussions on the future of Nigerian businesses.

During a fireside chat at the summit, Elue said businesses needed to reduce dependence on their founders by establishing systems and structures that could support sustainable expansion and scalability.

“It is important for us as stakeholders to support the ecosystem. A business must move from being person-dependent to system-driven. Do you have systems and structures that speak to viability? It is about building financial structures that ensure corporate governance. That architecture is required to multiply revenue and grow in line with customer demand,” he said.

Elue identified asset-liability mismatch as a major weakness in the existing financing architecture, explaining that businesses frequently need longer-term capital while much of the funding accessible to them has shorter repayment structures.

“One of the biggest challenges within the current financing architecture is asset-liability mismatch. Businesses often require long-term funding, while the available financing is largely short-term, creating significant liquidity pressure. Businesses must therefore structure their financing with scalability in mind,” he said.

He further highlighted the importance of financing readiness for businesses seeking credit or investment. According to him, financial institutions need businesses to demonstrate their cash flow through dependable financial records.

Elue also said ProvidusUnity Bank was deliberately working to deepen its contribution to Nigeria’s SME ecosystem as part of its broader role in economic development.

The Go Local Summit builds on the bank’s SME Programme, which ProvidusUnity Bank said has increased the capacity of more than 500 SMEs over the past six years.

The programme, according to the bank, underscores its continued focus on helping businesses build resilience while contributing to Nigeria’s economic growth.

Source: The Guardian