Nigeria’s largest lender, Access will be unveiling its creative sector loan product that will give big and small players in the sector access to affordable credit.
According to people with the knowledge of the matter, the product which is to be launched today at the company’s headquarters in Lagos will enable entertainment companies and startups to access credit for as low as 8% with a maximum tenor of 10 years.
This is a major sell for media and entertainment companies who used to borrow as high as 20 to 25% for term loans with stricter conditions.
A source close to the bank said the loan facility will target cinemas, TV and radio stations, films, music, content production, tech and fashion startups and existing business. Sources said while the loan conditions have not been released, there are indications that the process will be very much easier because it is a different product with different sets of customers.
The recent effort of Access Bank to develop a specific product for the creative sector will be an addition to the government-owned Bank of Industry, BoI’s creative industry credit programme that has funded the expansion of several media and entertainment companies.
However, BoI’s effort could be seen as a drop in the ocean giving the potentials and opportunities in the Nigerian sector industry. For instance, the Nigerian film industry, Nollywood which has been adjudged as the third largest in the world but it has gotten where it is by individual efforts of its players. While recent efforts from investors to fund bigger feature films and projects, there are still funding gaps to improve quality, remuneration and content which is a major challenge of the sector.
A compelling case for these kinds of direction is that foreign media giants and tech companies are aware that the Nigerian creative sector is full of untapped potentials. Late last year, video-streaming giant, Netflix made its first acquisition of Nigerian content with a purchase price for LionHeart at $5 million.
For Access Bank, it could be a very strategic move to expand its niche from big business and corporate banking into a consumer-focused and small/startup side of things.
It would be recalled that Access Bank, a corporate and commercial banking focused group merged with Diamond Bank, a retail-oriented lender to form the new entity. Prior to the merger of both banks, Diamond used to fund small businesses as well as individuals who run businesses in the creative and media industry.