The Small and Medium Scale Enterprises (SMEs’) access to finance and train entrepreneurs to play their statutory role is vital. For Akwa Ibom State, a pointer to the government’s commitment to growing SMEs’sector is the existence of the Directorate for Microfinance and Enterprise Development, writes COLLINS NWEZE.

 

Finding innovative solutions to unlock sources of capital for Small and Medium Enterprises (SMEs) and training entrepreneurs should be one of the priorities for every far-sighted government.

Reason? SMEs play a major role in most economies, particularly in developing countries. They account for the majority of businesses worldwide and are important contributors to job creation and global economic development.

In Nigeria, most formal jobs are generated by SMEs, which create seven out of 10 jobs. However, capacity building  for entrepreneurs remains a key constraint to SMEs’growth. It is also one of the obstacle facing SMEs in emerging markets and developing countries.

Also,  over 40 million SMEs exist in the country, employing over 80 per cent of the country’s population and con­tribut­ing about 50 per cent of the country’s Gross Domestic Prod­uct (GDP).

Akwa Ibom State Government has, however, taken major steps to address the challenges facing SMEs. Its Governor, Udom Emmanuel had unfolded various support for operators of such businesses, knowing the SMEs constitute the foundation on which any economy rests.

In fact, they are the engine room that powers economies around the world, including the developed economies. A country that seeks to have a strong economic base must have a thriving SMEs sector.

This understanding has been playing out in Akwa Ibom State where, in the last six years, Emmanuel has been developing the SMEs sector by empowering small businesses and encouraging the setting up of new ones through various interventions that are aimed at supporting the state’s industrialisation efforts.

His administration has been encouraging the people of the state, especially the youth, to demonstrate the Dakkada spirit by taking their destiny in their hands to chart the course that would change their socio-economic circumstances and, in so doing, contribute to the economic development of the state and Nigeria as a whole. In fact, the SMEs sector is one area where the philosophy is finding expression most through self-help.

The youth are designing their destinies by taking advantage of the numerous opportunities that abound in the state to seek to become business owners in diverse areas such as hospitality for which the state is well known, fashion, agriculture, furniture making, ICT, among others.

The government’s efforts at supporting the growth of the SMEs sector is aimed at enabling it to contribute to the gradually changing status of Akwa Ibom from a public service to a private sector-driven state that would be Nigeria’s industrial hub and a major player in the economy of the West African sub-region.

For instance,  the Directorate for Microfinance and Enterprise Development, with responsibility to, among others,  organises business advisory and training of start-ups in what is tagged, ‘My Entrepreneurship Goals Programme (MEGP) is a major pillar in empowering the SMEs.

At one of such training that ran for three months, youths were trained and given orientation on businesses that are relevant to the development of the SMEs sector in the 21st Century. The curriculum of study for the programme was designed to develop small businesses through value addition. A major value addition to the growth of the SMEs sector is government’s commitment to attracting start-up funding for young entrepreneurs.

According to Emmanuel,  the  Directorate for Microfinance and Enterprise Development has been a channel for discovering enterprising youths in the state through the Dakkada entrepreneurship and business campaign.

This led to the formation of Dakkada Multipurpose Cooperative Societies in all the 31 local government areas of the state, as well as the Dakkada Business Forum. The recruitment of over 18, 000 Dakkada ambassadors is part of efforts to ginger the youth to participate in shaping the economic fortunes of the state.

Analysts  said the failure of governments in Nigeria at the federal and state levels to match words with action has resulted in a situation in which there is a huge trust deficit between the people and governments.

People are wont to view every government promise and action with skepticism and, in some cases, cynicism, if not outright hostility. This doesn’t seem to be the case in Akwa Ibom, where Emmanuel has proved to a man whose word is his bond, the reason he has endeared himself to the people of the state.

Emmanuel announced, on assumption of office in 2015, his intention to industrialise a state that was traditionally public service oriented. At that time, the state boasted of only one industrial establishment – Champion Breweries – which stood as a reminder of the Second Republic era of the late Clement Isong, when the state was part of Cross River State. By the time he was ending his first term, he had delivered about 16 functional industries. No government in Nigeria’s modern history had done that, whether at the federal or state levels.

With every sector – industrialisation, infrastructure, health, manpower development, power, agriculture, aviation, among others – littered with unparalleled achievements, the people of the state have no difficulty trusting him to deliver on every promise he makes.

The enthusiastic response to the effort to establish a strong SMEs sector to support the administration’s industrialisation drive, especially by youths, is evidence of that trust. They see themselves playing more active roles in their personal economic emancipation and also contributing to the sustainable development of the state.

There is, at the moment, a frenzy among the youth to participate in the ‘Ibom 3000 Project’, a programme the government is putting in place to train a total of 3000 entrepreneurs. The programme targets creation of over 14, 000 SMEs in industrial clusters to be set in the three senatorial districts of the state. The clusters will be equipped to offer the kind of specialised training that would enable entrepreneurs to go into such sectors like agriculture, mining, ICT, hospitality, leather and raffia works, fashion, furniture, confectionary, and bakery.

It is quite remarkable that while the government works to create direct, paid employment through establishment of industries in different parts of the state, it also encourages the people to create self-employment through entrepreneurship. It must be noted, also, that every entrepreneur will be in a position to offer employment to others, as there is no kind of business that only one person can operate.

The benefits that will accrue in the entire value chain are quite enormous – availability of products and services at the micro, small and medium level, stimulation of economic activities, job creation and improvement in standard of living.

 

By Collins Nweze

 

The Bank of Industry (BoI) has partnered with the Ondo State government on $20 million Covid-19 relief scheme that would enable both parties salvage over 5,000 Micro, Small and Medium Enterprises (MSMEs) from the negative impact of the pandemic  and eradicate poverty.

At the signing of the Memorandum of Understanding (MoU) at the Ondo State Governor’s Office, Akure, BoI Regional Head, Southwest, Michael Oye, said the event marked formal enlistment of the state in the Nigeria COVID-19 Action Recovery and Economic Stimulus (NG-CARES) programme.

According to him, it is a tripartite programme of the World Bank, Federal Government and state governments that utilises existing Federal Government platforms.

The scheme targets existing and newly emerging vulnerable and poor households, agricultural value chains and Micro Small and Medium (MSMEs) affected by the economic crisis sequel to COVID-19 outbreak.

According to Oye, the amount of money to be disbursed to the beneficiaries varies based on their areas of specialisation and the sector in which they are working as MSMEs.

He revealed that the state subscribed to two of the three Disbursement Link Indicators (DLI) available in RA-3, which he listed as credit support for working capital requirements (DLI3.1) and subsidised operational cost support (DLI3.2).

To ensure success of the programme, he also revealed that there is a robust feedback mechanism to evaluate and monitor the scheme.

Secretary to the State government (SSG), Oladunni Odu, who signed the agreement, affirmed that the programme would broaden the frontiers with relevant stakeholders to mitigate the effects of the pandemic in Ondo State.

While lauding the organisation for partnering with the state, Odu added that the programme would tremendously assuage the suffering of the people and set the state’s economy on the path of speedy recovery.

By Collins Nweze

 

Paxful, the global peer-to-peer fintech company, says it achieved N92.25 billion transactions by Nigerians on its platform from March to June 2021.

Speaking on its sixth anniversary, Founder & CEO, Paxful, Ray Youssef said said the company was elated to be celebrating six years of continuous growth as a business.

“Just recently, Nigeria emerged our biggest market, we hit $1.5 billion in volume with over 1.5 million users. Despite the ban of cryptocurrency in the country, we have seen tremendous adoption of our peer-to-peer platform.  From March to June 2021, Nigerians traded N92.25 billion ($225 million) on Paxful and we are on track for over 20 per cent increase in volume this year,” he said.

“We are also excited that our mission to give everyone equal access to finance no matter who they are or where they are so they can control, own money and build the future they want with financial freedom is being materialized. The weeklong conference is another opportunity for us to educate our 2.5m users across Africa to learn and make great decisions that will impact their lives positively”. he added.

Paxful will be hosting a weeklong virtual event around the globe. The conference is scheduled to run from 12th to the 16th of July 2021.

The event will be featuring reputable speakers across Africa which includes Farzam Ehsani, Founder & CEO, VALR (South Africa), Philip Asare, Founder, Blockchain Foundation Africa, and CEO at BTCGhana (Ghana), Ugochukwu Aronu, Founder & CEO, Xend Finance (Nigeria), David Gitonga, Founder, BitcoinKE (Kenya), Artur Schaback, Co-Founder & COO, Paxful and Abikure Tega, CEO, KurePay.

Topics of discussion will involve financial inclusion and how Africa is taking the lead. Fintech Association of Nigeria will be leading the discussion on crypto disruptiveness. Paxful’s Built with Bitcoin Foundation Director; Yusuf Nessary will give a presentation on Bitcoin for Social Good.

A panelist discussion on how crypto empowers the unbanked will be led by Ray Youssef, Co-Founder & CEO, Paxful and Victor Asemota, Growth Partner, AnD Ventures.

The virtual event will feature music from Nigerian identical twin singers, song writers and influencers; Oiza and Meyi likewise Nigerian hip hop recording artist; King Bawa.

The audience can tune in to Paxful’s YouTube channel on Thursday, 15th July (5pm – 7pm GMT+1) for an Africa-focused event where Paxful will celebrate its over 2.5M African users.

Additional achievements and milestones reached by Paxful include its Built with Bitcoin Foundation which has resulted in the building of four schools in Africa: two in Rwanda, one in Kenya and the fourth in Nigeria. From two formerly homeless founders, Paxful has grown to over 200 employees spread out across four offices.

 

By Collins Nweze

 

 

Few research by Enhancing Financial Innovation & Access (EFInA) has shown that blockchain technology can  $29 billion to Nigeria’s Gross Domestic Product (GDP) by 2030 and promote financial inclusion.

The report, titled ‘Potential of Blockchain for Financial Inclusion in Nigeria,’ outlines the potential of blockchain to drive financial inclusion and illustrates potential use cases of blockchain technology in Nigeria.

Driving financial inclusion in Nigeria has been highlighted by the Central Bank of Nigeria (CBN) as a key objective. However, EFInA’s 2020 Access to Financial Services in Nigeria Survey highlighted that financial inclusion in Nigeria stands at 64 per cent, falling short of the National Financial Inclusion Strategy of achieving 80 per cent financial inclusion by 2020.

The EFInA blockchain study highlights that blockchain-enabled solutions can support progress towards the Nigeria’s financial inclusion targets and address some of the key challenges around financial inclusion such as lack of formal identity, high transaction charges, and lack of transparency.

EFInA, said achieving this would require instilling trust in business, government transactions, and processes. EFInA identified four key use cases of blockchain technology in Nigeria – enabling identity management, payments, access to finance, and land titling and registration – outside of cryptocurrency, which is a major application of blockchain technology and a recurring topic of discussion amongst regulators and government entities around the world today.

Circulars recently released by CBN and Securities and Exchange Commission (SEC) on cryptocurrency speak to the fact that blockchain technology is on Nigerian policy makers’ radar. Cryptocurrencies fall into different categories – speculative coins, stable coins, and central bank digital currencies – which have varying opportunities and degrees of risk.

The Central Bank of Nigeria has recently announced plans to launch a Central Bank Digital Currency, which has the potential to support governmental intervention schemes for those in underserved areas and enable efficiency in cross-border remittances.

To ensure that the potential of cryptocurrency and blockchain technology is realised in Nigeria, a collaborative effort among multiple stakeholder groups is essential – Regulators, Financial Service Providers, Development Institutions, and Donors /Financial Sector Development organizations.

These stakeholder groups must find ways to communicate and collaborate to spur innovation-friendly policies and ensure we take a risk-balanced approach in implementing emerging technology in Nigeria.

Other countries have leveraged public-private partnerships and adopted blockchain technology to drive inclusion and efficiency in their financial systems. For instance, the South African Reserve Bank, in collaboration with ConsenSys (a fintech) and the national banking community, leveraged blockchain to reduce transaction processing time by 75 per cent while increasing trust, confidentiality, and scalability in their financial system.

The Nigerian financial ecosystem must take learnings from other climes and find ways to apply them locally to improve how we transact with one another and enable inclusion for Nigeria’s most vulnerable groups.

By Collins Nweze

Tech educational partner for enterprise and governments, Elev8 education has announced plans to train up to 1000 companies by 2022 in technology specialised programmes to help businesses live up to their full potential.

Speaking at a media meet hosted by elev8 education, Country Head Ashim Egunjobi said ‘’the country is still recovering from the economic effects and we realise that businesses/ companies both public and private are also struggling to stay afloat.

‘’As we enter into the second half of the year, it is imperative to look back, strategise and ensure that companies make use of all necessary technological tools available moving forward to scale up their operations to meet their goals.

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‘’These technological advances and tools have been proven to enable  businesses to work more efficiently in several different ways and while  Information technology drives innovation and innovation is the path to business success’’.

Elev8’s commitment is to help equip IT specialists, business managers, and leaders  in over 1000 companies by 2022 to upskill and reskill so that they can comprehend, adapt, and thrive in the ever-changing digital landscape  and turn to raise value chain and putting money back into the economy.

As Nigeria struggles to keep up with the rest of the world, there is a greater need, above and beyond our existing one, for Nigeria’s workforce to be technologically educated, trained, and upskilled. Failure to do so will be devastating as our country and businesses be quickly left behind in today’s highly competitive global economy.

By Collins Nweze

Infinity Microfinance Bank Limited has unveiled its new brand identity across all of its 20 branches in Lagos State.

Speaking during the unveiling of the bank’s new identity at the bank’s head office in Lagos, its  Co-Founder and Pioneer Managing Director, Mrs. Clara Oloniniyi  said the bank unveiled the new logo to celebrate its unending growth, vibrancy and success.

“This followed the successful 20 years of doing microfinance business in Nigeria,” she said.

According to  Oloniniyi, the bank’s history started in 2001 when it started a modernised  local community savings outfit in Ketu Lagos.

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She said the  bank has witnessed smooth and steady transformation over the years by providing diverse basic banking services to her teaming customers that have grown to hundreds of thousands.

“In 2005, we transformed from a local money collector to a community bank with the required  N5 million capital base. In 2007, the Federal Government proscribed community banks and came up with a new Microfinance Banking Policy and we upgraded the institution to Infinity Microfinance Bank by meeting the required N20 million capital base. However, today, I am proud to announce to Nigerians that Infinity Microfinance Bank Ltd is a state microfinance bank,” she said.

Also speaking, the bank’s Managing Director/ Chief Executive Officer, Also, Oludotun Adewumi, said: “Infinity Microfinance Bank is now set to continue to assist more customers in the Micro Small and Medium sector with more business loans, having grown our capacity and reach over the years. One of the customers of the bank, Jonathan Abaniwonda, commended the bank  for standing tall among other microfinance banks’’.

The Chief Consultant of the bank, Tope Oloniniyi said the bank still aspired to become a National microfinance Bank in the next three to five years. I can tell you that we have all our plans intact and we are going to hit our target.”

He, however appealed to President Mohammadu Buhari to consider post Covid-19 intervention for Microfinance Banks so they could improve on the financial empowerment to the active poor Nigerians.

By Simeon Ebulu

Fidelity Bank Plc recognises the critical roles Micro Small and medium Enterprises (MSMEs) play as vital agents of economic development and transformation.

Theophilus Nwankwo, an indigenous manufacturer who produces a wide range of plastic products in Lagos, recounts his experience and lessons learnt in his entrepreneurial journey. His business was forced to close after a large client placed a major order for his products.

Nwankwo needed a loan to purchase an advanced equipment to fulfill the large order, but it was 2021 and the country was still grappling with the economic recession occasioned by the COVID-19 pandemic. Fidelity Bank provided him with the funds he needed to keep his end of the bargain. Mr. Nwankwo is one of many Micro, Small, and Medium Enterprises (MSMEs) struggling to stay afloat.

According to a report by the National Bureau of Statistics (NBS), SMEs in Nigeria have contributed about 48 percent of the national GDP in the last five years.  With 17.4 million, they account for 84 percent of employment and nearly 90 percent of the manufacturing sector regarding the number of enterprises.

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These figures notwithstanding, MSMEs remain largely bedeviled by a number of problems inhibiting them from reaching their potential with limited financing options being one of the main drawbacks they face.

Fidelity Bank’s mission to bridge the yawning capacity building gap and help SMEs in Nigeria build the necessary capacity for entrepreneurial success is evident across their various SME targeted products and services. They currently offer a suite of tailored offerings to position Nigerian SMEs for sustained business growth. These product offerings have resulted in tremendous success for the benefiting SMEs and also setting them up for sustainability.

Some of these products include the Fidelity SME Academy , which is a platform where prospective and existing customers enjoy free capacity building support services such as tailored one-on-one virtual business advisory services and access to business management capacity building programs with alliance partners.

There is also the Fidelity SME Forum which is a 30minute experience and knowledge sharing radio and Instagram Live programme aimed at empowering Nigerian entrepreneurs with knowledge, know-how and expertise that will enable them to build successful businesses. The programme currently airs on Inspiration FM 92.3 in Lagos on Tuesdays live at 6:30 am, with a repeat broadcast on Thursdays at 6:30 PM on the same station.

In line with their avowed desire to be the go-to bank for funding and allied support for SMEs powering the growth and development of the Nigerian economy, they have paved easy access to low-interest credit facilities with flexible collateral requirements.

Some of these bespoke financing/loan products include Fidelity EduLoan Offering (for schools), Fidelity Private Medical Support Scheme (for hospitals), Fidelity Pharmacy Support Scheme (for pharmacies), the Commercial Support Short Term Loan (for traders), Traders Support Facility, the Commercial Support Overdraft (CSO) and the Fidelity Distributors’ Finance Scheme (for distributors of Fast Moving Consumer Goods companies).

Nigerian SMEs hold the potential to contribute significantly to the growth of the economy. It is, therefore, imperative that adequate support in terms of finance is provided, with the aim of unlocking the further growth and expansion of this sector in Nigeria.

By Collins Nweze

 

The Purchasing Managers Index (PMI) for last month shows a positive end to the first half of the year with expansion recorded in the private sector.

The report said greater client demand in domestic and international markets led to a sharp and accelerated rise in new orders.

The output, purchasing and employment growth softened during the month.

Meanwhile, firms reduced their backlogs at the second most marked rate in the series. Sentiment regarding output in the year ahead was weak    in the context of the historical average, but firms continued to foresee a rise in output by June 2022.

On the price  front, overall input price inflation was robust, but eased to the softest since last December despite a sharper rise in purchase costs.

The headline figure derived from the survey is the PMI. Readings above 50 signal an improvement in business conditions on the previous month, while readings below 50 show a deterioration.

At 53.6 last month, down from 54.4 in May, the headline PMI registered a solid rate of growth, but one which moderated from May’s nine-month peak. The latest uptick extended the period of expansion to 12 consecutive months, however.

New order inflows rose strongly in June, with the pace      of expansion quickening to the fastest since  January, last year. Greater client demand was often mentioned by respondents. International demand for Nigerian goods and services also increased, and at the fourth-quickest rate in the series.

Although client demand rose at a sharp and accelerated pace, output growth moderated in June. The rate of expansion was still solid but posted below the long-run series average. Sector data revealed services recorded the sharpest increase in activity followed by wholesale and retail and manufacturing.

Meanwhile, Agriculture registered a fractional rise.

To support higher output, firms engaged in buying activity with growth now seen in each month since last July. Inventories also rose at a similar pace, though the rate of expansion softened in both.

Workforce numbers rose marginally last month, which coincided with only a slight rise in staff costs. Amid efforts to keep on top of outstanding business, backlogs fell at the second most marked rate in the series, surpassed only by that seen in February.

On the price front, higher raw material costs underpinned a rise in purchase prices which quickened to a three-month high.

Overall input prices rose sharply, though at the softest rate since last December. Higher prices were passed on to clients, with the rate of charge inflation robust overall.

Finally, firms remain optimistic about their output prospects over the year ahead, but the degree of positivity was far below the series average in June.

By Collins Nweze

Heirs Insurance Limited (HIL) and Heirs Life Assurance Limited (HLA) have announced plans to host over 300 brokers at the Nigerian Council of Registered Insurance Brokers’ (NCRIB) monthly forum.

The event, which is scheduled to hold today in Lagos will have the leadership of both companies meet with brokers from across the country to further solidify existing relationships and discuss ways to improve the industry.

According to the Managing Director/CEO, Heirs Life Assurance, Niyi Onifade, this gesture will enable the companies to achieve the goal of providing customers with insurance that is simple, quick, accessible, and reliable. He stressed the importance of strengthening such relationships for the improvement and practice of insurance in the country to meet the needs of the 21st century customer.

Acting Managing Director/CEO, Heirs Insurance , Dr. Adaobi Nwakuche, described the opportunity as timely and with great potential. According to her, brokers are key stakeholders and hosting the brokers’ forum provides both companies an opportunity to discuss matters pertinent to the advancement of the industry.