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The Sycamore Story

 

Why Start Sycamore?

Sometime in 2018, 3 students of Lagos Business School (LBS), stumbled upon a problem. In carrying out research on financial services in Nigeria, they observed that most people who get loans from the banks are either High Net Individuals (HNIs), or big corporates. Indeed the Asset Management Company of Nigeria (AMCON) once published a list of 400 debtors, who collectively owed over N4.5 trillion: this is about half of Nigeria’s 2019 budget by the way. So it’s safe to say that the banks mainly serve the upper echelon of the society.

So what about the alternative online lenders? After all, there are over 50 of them as at our last count (read about a few of them here). These online lenders have done a fantastic job towards advancing the credit culture in Nigeria, as many of them provide collateral-free loans upon very short notice (subject to certain requirements of course). Unfortunately, many of them cater mostly to salary earners.

This then begs the question: who provides loans to the small and medium scale enterprises (SMEs)? Certainly not the commercial banks (see graph below). How do over 37 million SMEs in Nigeria get access to credit when they need to grow their business? This is the problem we observed and is why Sycamore exists.

Just to clarify, there are some available options for SMEs to get loans. However, we believe that these sources of capital for SMEs are simply not enough, and many of the lenders still make the process very difficult and cumbersome for small businesses to comply.

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To tackle this problem holistically, Sycamore has framed its business around three Sustainable Development Goals (SDGs), to keep us in check, and ensure that we are making a positive impact, even as we strive to manage a good business. We call this initiative “One-8-Ten”, in reference to the following SDGs:

See further details below:

1. SDG One — No Poverty

With one of the highest poverty rates in the world, we strongly believe that empowering SMEs is one of the ways to lift those at the bottom of the pyramid out of poverty. Muhammad Yunus demonstrated that this is possible through his work at Grameen Bank in Bangladesh

2. SDG 8 — Decent Work and Economic Growth

Empowering SMEs undoubtedly goes a long way in fostering economic growth. This particularly applies to Nigeria as SMEs contribute almost half of our Gross Domestic Product (GDP).

3. SDG Ten — Reduced Inequalities

Nigerian SMEs currently account for over 80% of the employment in Nigeria. This means that encouraging their growth, and helping them transit from small to big businesses, definitely goes a long way towards reducing inequality.

We will write more about these SDGs in more detail, and will also make separate posts to show specific ways our business is helping to champion them.

Yes, these goals are grand and ambitious but we would not have it any other way. You can help us kick start this change by following us here and recommending our service to an SME you know. Let’s do this together!

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