The Nation Newspaper

Category: Small Business and Entreprenuership

  • ‘Pensions now fully secured’

    ‘Pensions now fully secured’

    Umaru Modibbo, Managing Director/CEO of Sigma Pensions Limited, is optimistic that the pension funds are fully secured and safe. He spoke with Joe Agbro Jr.

    With N3.5tr pension funds in the pool and over 5.6 million workers, how do you think these funds should be invested to ensure optimum returns on investments?

    Already, these monies are not idle. As prescribed by PENCOMM, we can invest even up to 100% in government securities. We are holding government securities. We’re also having investments in money collection banks. And we also have equity. So, the monies are already being utilised by the economy. It’s inside the economy already. It’s not that it is a pile of money sitting somewhere. No, it’s in the system already.

    At Sigma Pensions, what share of the PFA market do you control?

    I’m controlling about ten to 11 percent of the market. I have a total of N240billion I am managing as at today.

    There has been claims by some workers that companies don’t remit their share of the pensions pool as at when due. What legal remedies are open to employees of those companies?

    Under the law, the Reform Act says you should remit it (pension) seven days after the last pay day. But if you don’t do that, you’re bound to pay interest rate of whatever amount you withhold. In fact the National Pension Commission has started appointing companies to go after these defaulting employers and get them to pay. And they have started paying. Some law firms and accounting companies were appointed by National Pensions Commission to pursue these defaulting employers and get them to pay together with the interest to the organisation.

    A lot of people’s confidence has waned in the areas of pensions, especially in the area of misappropriation of funds in different quarters of the economy. There is a fear that their pension would be subject to such. How do you think the confidence level of these categories of people bee buoyed?

    Actually, when you’re talking about pensions, I know it’s a generic word. When you say pension, they will get scared. But, you know, we are transiting from the old scheme to the new scheme. The old scheme is the one that has issue. And we are the new ones that are coming in to replace them. So, these things are going to be phased out in a way because for now, all these pension scams that you are hearing is associated with the old scheme. And that is why the Act itself transits to the new scheme. So, there is this perception. I know it is a problem to distinguish between the two.

    So, you’re saying the new scheme is better than the old scheme?

    Definitely. That is why we are saying that we have N3.5trn in the past eight years and there is no single fraud, no single one kobo, is lost because of thee segregation of duty. The pension administrator is just administering this fund while the custodian is in custody of these funds. And these custodians are the big three or four banks in the country. We all know them – First Bank, UBA, Zenith and Diamond Bank. They are the ones holding this money. We can’t touch this money. We are just the administering them. We give them instructions. They would not do anything except with our own instructions while they are holding the money and PENCOMM being the referee, is sitting there and watching over. And we do reconcile these accounts on a daily basis. So, if there is a discrepancy of one kobo any day, you’ll report. And this money is already in the market place, it is in the economy.

    What would consider as some of your greatest challenges after about eight years as head of Sigma Pensions?

    The challenges have always been compliance. People don’ want to comply, especially employers. Consider our population. We are 160 million. What percentage is the working population in Nigeria? We are possibly like 45 million by our estimates. Only about 5 million are registered out of an estimated working population of 45 million. So, where is the 40 million? Add that 40 million on top of five million and you will see the difference. You will see the amount.

    You talked of companies not being compliant being the major challenge. What do you think should be done to make companies more compliant?

    Like I said, we need to get them. Some of them would say, ‘I don’t have the money. It’s an additional expense to my payroll, why would I pay?’ But the issue is that we’re trying to sensitise the workers. It’s their rights. If an employer is short-changing you in a way because it is your money he is reducing. Some would even deduct and not pay. So, double jeopardy. He refuses to pay his portion. He took your own portion and refused to pay. So, he has taken two times of your money. He is supposed to take 7.5% from your salary which he has done. He is supposed to take another 7.5% to make it 15%. So, he has taken 15% of your salary. Why would you allow him? You (employee) are suppose to whistle-blow. Tell Pencomm that his guy is taking my money and he is not paying. Or he has refused to comply. You can do that anonymously without being known. You can write a letter without putting your name. The regulator would now send an investigator to track compliance because he would tell them his why he is no remitting or he is not even complying.

    How would you describe your experience in business?

    We brought a crop of people who are seasoned who have been in the financial market. And by regulation, for you to even be a managing director of a PFA, you have to have 20 years relevant cognate financial services experience. The rules are very clear. You cannot just bring anybody and say, come and manage this place. We have for each grade of employees, we have the number of financial services you need to have. That has been the rule and we have been following it throughout the cadre from the bottom to the top. So, whoever you see that is in the pensions industry must have been qualified to be there because your approval for appointment would have to be given by the National Pensions Commission and they are very strict on that. So, I don’ have any problem. And you can see the pedigree of those that are on board. And the management, they are all qualified by the law and they have the required financial and regulatory requirement.

    So, what is your management style like?

    We are consultative. We are open. We take feedbacks from clients and we try to improve on a day to day basis.

    How do you motivate your staff?

    Engage them. We encourage them, let then be a part of the business. We even give them shares so that they would be co-owners of the business. We have what we call staff share scheme which we have given them five percent of share capital of the company to be distributed to the staff on loan which they pay gradually. And it makes them feel they are part of the company and theey aree part of the successes.

    And how do you scold erring staff?

    We have internal disciplinary mechanism and there are also rules governing that. If you are caught with some bad behaviour, after being dismissed, you can also be blacklisted. And nobody else would employ you in the industry. This, we have been doing and I think we’ve been very successful in that,

    As a CEO, what are the simplest and the toughest decisions you’ve had to make?

    Simplest decisions are the day to day ones. These are very difficult questions. But to make people change is difficult because people are used to adhering standards. You have to put your feet down and say, ‘this is the standard I want to maintain.’ And whoever cannot meet that standards, then you show him the way out.

    What drives you as an individual?

    What motivates me is success and more success

    And your ideal worker?

    My ideal worker is somebody who is performing higher than his target. And I think that is the benchmark for measuring it.

    How do you measure staff loyalty?

    First, you meet your target. I don’t want somebody to be loyal to me and not meet his target. Meet your target first before any other thing.

    After being MD of Sigma Pensions, what plans do you have?

    I will retire and get my retirement benefits.

    Your best holiday choice?

    I go to the village where it is quiet and then I rest.

    Any hobbies?

    Not quite. I’m not a sportsman.

    So, how do you relax?

    I relax when I go reading

  • GTB lifts SMEs at Lagos fashion exhibition

    GTB lifts SMEs at Lagos fashion exhibition

    As a demonstration of its commitment towards the development of the small and medium scale enterprises in the country, GTBank facilitated the GTB Lagos Fashion and Design Week recently.

    The essence of the exhibition, according to the organisers, was to present a perfect opportunity for fashion and fashion related community to show their work before a focused target audience, which holds a vital tool for the creative development of Nigerian creative industries.

    One of the exhibitors, St. David’s , experts in leather craft, with a special focus on shoes, opened its array of stylishly crafted leather products from shoes, bags, belts, wrist bangles and other custom leather products. There was a bespoke touch among the items shown.

    A few other labels alongside St. David’s at the exhibition include Nikki Khiran, Buttons, Republic of Foreigner, Mode Arts and Olanrewaju Lagos.

    Justifying his firm’s participation at the exhibition, Creative Director, St. David’s, said it was to create awareness for African shoe designs, in terms of quality and style.

    “We have come to show the public that leather items that can match world standard can be produced here in Nigeria. This is also reflected by the expression of awe shown by visitors to our stand. A lot of them have realised that their quest for Italian shoes was futile all along,” he emphasised.

    The St. David’s brand also gave an insight into its youth empowerment programme, which it runs in collaboration with a non-profit, nongovernmental organisation, Youth Concerns and Development Initiatives Africa.

    The aim, according to Davids, “Is to train young Nigerians on leather craft, at the end of which they would be self sufficient. We seek to admit young and vibrant school leavers who are passionate about carving a niche in leatherworks for themselves. Youth empowerment has always been our drive at St. David’s Skill Acquisition Training (SSAT). We help reduce the unemployment rate in our country, Nigeria and beyond.”

  • ‘Experience not vital to success‘

    ‘Experience not vital to success‘

    Opeyemi Awoyemi is one of the founders of Jobberman, the nation’s biggest online job search  firm. He was selected by Business Impact Limited to speak at an entrepreneur forum, as part of activities marking the birthday of its Chief Executive, Samson Olatunde, in Lagos. Daniel Essiet was there.

    AS success anything to do with experience? No, say some experts.

    The story of Opeyemi Awoyemi, and, who started Jobberman, an online job search firm, shows one can achieve anything one dreams, experience not withstanding.

    The trio are among best and brightest young entrepreneurs who have been making waves even before graduation.

    Their lives led credence to the fact that inexperience shouldn’t hold anyone back from being an entrepreneur.

    With hard work, good ideas and strong determination, anyone can turn his business dream into a reality.

    Combining class work in order to keep good grades is a load some young people cannot carry.

    Awoyemi, who was  selected by Business Impact Limited to feature at an Entrepreneur Forum, where he offered advice to would be entrepreneurs, give tips on success.

    The event  was  organised to mark the birthday of Business Impact’s Chief Executive, Samson Olatunde.

    It featured successful business men and women who shared how they made their mark so that people in their undulating world of business.

    Awoyemi provided an inside account of how Jobberman.com became one of the leading online recruitment firms, including his journey into becoming an entrepreneur, the pitfalls to watch out for, deciding when to sell and to whom and the importance of effective marketing and branding.

    He said the idea of Jobberman came to him in his third  year at the Obafemi Awolowo University (OAU). A friend suggested the name and he played around with it for a while.

    In 2009, Deji Adewunmi and Lekan came on board as co-founders. He had to combine school and business.

    Like Mark Zuckerberg, founder of  facebook, who developed the successful network while in Harvard University, United States, Awoyemi has become a household name. The firm boasts of over one million users. He  has  his office at Lekki, Lagos. He has more than 100 clients. He has  been able to expand his business across the country.

    He graduated from OAU with a Second Class Upper degree. His  idealogy is that young people should set their lifestyle. “Be clear on how to achieve your goal. Trust God to make things happen, he advised.

    Awoyemi is determined. He hopes to inspire budding entrepreneurs to start up their own businesses.

    He was not the only one who spoke at the event. Chief Executive, Inspiro Consulting, Olujime Tewe, said he is a big believer in supporting up and coming entrepreneurs, noting that they help to shape the economy of the future. He had always aspired to be an entrepreneur, but the timing never seemed right.

    A pastor with Kingsword Ministries International, he studied Agricultural Economics, he wanted to study Medicine because he had a his uncle, who lived abroad is a medical doctor. Besides, he was rich.

    He was motivated to take after him. But this was not to be. He later changed his mind when he had a cousin living with them. He was studious, even when she was not preparing for a test or exam, he would read.

    On graduation, he  joined Restral, where he honed his skills in  management consulting and human resource.

    He later joined Accenture as an analyst and worked in the different fields of human resource. He was in the Human Performance Workstream.

    He left for UBA, where he became a manager. He worked the longest – two years and four months – at he bank. He got tired of the environment and moved on to Bank PHB as Head, Recruitment. He worked for a year and three months before quitting to start his own business.

    According to him, achieving his life dream. He said he didn’t change jobs because of money but  he needed to fulfill his heart desire.

    Having worked for about eight and half years in four firms, he said it was time to go.

    He said he set up Inspiro Consulting to  help people become aware of who they are and how they can match that with what their ambition.

    “We are focusing on certain target markets and tailoring programmes and solutions to meet their needs,” he said.

    According to him, young people greatest assignment in life is to discover who they  are and to become what they  are meant to be. Discovery, according to him, is not an event, it’s a process.

    He  said there are many journeys to success, and numerous life stories to prove it.

     

  • How CBN intervention will aid female entrepreneurs

    How CBN intervention will aid female entrepreneurs

    In the business sector women have indeed come a long way. However in spite of the achievements recorded, there are a number of setbacks which has been traced to lack of capital to fund their businesses. Bukola Afolabi takes a look at a fresh financial window for women entrepreneurs by the Central Bank of Nigeria.

    To make life better for female entrepreneurs, the apex bank recently announced a nine per cent interest rate on the N220 billion loans for Micro, Small and Medium Enterprises (MSMEs).

    Speaking at the formal launch of the MSMEs N220 billion fund at the 7th Annual MSMEs Finance Conference and D-8 Workshop on Micro-finance for SMEs in Abuja, CBN Governor, Mallam Sanusi Lamido Sanusi, also urged the microfinance banks to disburse the funds to individual beneficiaries at a single digit interest rate as this will strengthen the link between entrepreneurship and access to financial services.

    Sanusi also announced an interest rebate component for women in the fund to the extent that women entrepreneurs who borrow from MFBs (Micro Finance Banks) are able to access these funds for interest rate subsidy which ensures that they do not pay more than nine per cent interest on loans.

    He explained that the CBN would not be lending directly to businesses, but that the loan would be disbursed through the MFBs.

    Sanusi stated: “The CBN will not be lending directly to farmers or businesses. What this fund does is a wholesale fund. It provides funding to the participating financial institutions. If you are a microfinance bank in Benin, you can come to this fund. We assess you; we give you the money at low rate of interest long term, and then you undertake that you will lend at low rate of interest. Today, commercial banks charge 21 per cent and MFBs charge 30 to 40 per cent interest rate. We are not going to get anywhere near there”.

    Sanusi informed that: “These are small businesses that are highly profitable, highly risky and MFBs tend to charge higher and the greatest challenge is not really the interest rate, but the tenor. If you give someone money for two, three months, how much can he really do in such a short time? The way we plan it is that you start with a small amount, relatively low rates of interest and relatively longer tenor. When the MFB repays and establishes a track record, it is entitled to move to another level where it can get a large amount, lower rate of interest and a longer tenor”.

    The fund, announced last year, had been delayed because of the need to accommodate inputs from stakeholders and address key regulatory framework to aid its successful implementation.

    Specifically, it targets 60 per cent intervention for women entrepreneurs including insurance, capacity building and interest draw back. The CBN had also unveiled plans to introduce financial literacy in schools curriculum.

    Loans and advances sought by Nigerian businesses are largely short term in nature. This, in addition to huge interest rates charged by banks, significantly reduces real economic growth, financial experts have noted.

    Based on statistics from the Central Bank of Nigeria (CBN), out of the N8.14 trillion the deposit money banks (DMB) have advanced to businesses and individuals in loans and advances, a huge 97.2 percent of the loans are one year tenor, leaving just 2.8 percent to long term facilities.

    Mr. Paul Nduka Eluhaiwe Director, Development Finance Department, CBN, disclosed this in Lagos at the special general meeting of the Nigerian Association of Small and Medium Enterprises (NASME).

    Represented at the meeting by Jeremiah Abba, of the Development Finance Department, CBN, the statistics is indeed troubling and something must be done urgently if Nigeria wants to experience real economic growth.

    “As at June 2013, total deposits in Nigeria’s deposit money banks stood at N10.3 trillion. The total banking and advances in the economy closed at N8.14 trillion. 97.2 percent of these loans and advances are one year tenor. Only 2.8 percent are long term loans,” he said.

    He also noted that there is a huge funding gap for Micro, Small & Medium Enterprises (MSMEs) and a targeted effort must be made to correct the trend as CBN recognises a positive correlation between strong MSMEs improved capacities and economic growth.

    As part of effort to encourage MSMEs to access credit, besides the single digit interest rate on most of its intervention funds, it is also lowering conditions on collateral.

    Thus, he said the CBN is targeting October 2014 to test-run the registry of movable collateral for credit access.

    When that occurs, MSMEs can access finance through the use of movable collateral items such as: jewelleries, collectibles,   stock of goods, plant/machinery.

    In his comments, the President, NASME, Alhaji Garba Ibrahim lamented that in spite the several financial windows opening up for MSMEs in Nigeria, the MSME operators hardly hear about them or benefit from them.

    He urged those opening up funding opportunities for the MSMEs to always carry NASME along so its members can benefit from the interventions.

    The Nation learnt that the apex bank will especially consider the financial health of the grassroots banks before they can serve as conduits for the new stimulus package being put together by the regulator to energise the economy through lending to small businesses.

    Investigations show that some operators are anxious over their eligibility for the scheme since it was launched by the CBN, and have commenced redeployment and realignments of resources and processes.

    Tunde Lemo, Deputy Governor, CBN, who could not admit that most of the banks were weak and likely to close shop, said the regulator “will look at the track record and financial health before we allow participation. They will only act as conduits as the funds will be channelled to the eligible micro small and medium enterprises (MSMEs).”

    Onoja Usman, managing director, Lovonus Microfinance Bank Limited, said “most MFBs would not be able to access the fund because of the stringent criteria the CBN is using for the loan. We understand that rating agencies are being used to determine those that merit accessing the fund.”

    According to Usman, the fund will only serve few MFBs, as MFBs that are units may not access the fund because of impaired shareholders funds, which is ditto for those already struggling to operate as result of lack of operational capital.

    Mathias Omeh, former president, National Association of Microfinance Banks (NAMB), expressed happiness that government had recognised them at last, saying “it is encouraging that government is remembering microfinance banks. We have been longing for it.”

    The implication, according to investigations, is that the banks, which are currently undergoing routine examinations by the CBN and NDIC, may have to face the challenge of being certified fit to participate by scaling through the routine examination.

    The guidelines for participation by the banks and finance companies include compliance with regulatory capital, prevailing prudential ratios, average deposit growth rate of 20 percent per annum (for institutions operating for over two years), and average clientele base growth rate of 20 percent per annum (for institutions operating for over two years).

    The guidelines also include risk management framework and corporate governance culture acceptable to the regulators, degree of separation of ownership from control/management, and number of non-performing insider related facilities, among others.

    According to details released by the CBN, the participating financial institutions (PFIs) will include non-governmental organisations (NGOs) and micro-finance institutions, which will be able to access funding at an interest rate of 9 percent per annum, and lend it to other entities with a spread of up to six percentage points per annum.

    The scheme is expected to provide liquidity to PFIs on a maximum three-year tenor, with most institutions limited to N5 million or N10 million, but national microfinance institutions will be able to access N1 billion.

    There will also be a credit guarantee scheme, covering up to 80 percent of any default under the scheme, which will also be available to other ‘deposit money banks.’ The guarantee will also have a maximum tenor of three years, and attracts a fee of 1 percent of the guarantee’s face value, payable back to the CBN administered fund.

    The CBN shall appoint managing agent to manage the MSMEs fund and its day-to-day operations. It shall have a steering committee constituted in line with its approved shareholding structure and chaired by the governor of the CBN.

    The bank further said that a combination of the following collaterals shall be accepted by the managing agent as security for the exposure to PFIs; legal mortgage over acceptable and appropriately valued assets including undeveloped land, guarantees from promoters of PFIs and their partners that is acceptable to the managing agent, and any other collateral acceptable by the managing agent from time to time. 32 of such microfinance banks have already been selected.

    Sanusi said CBN had also established six Entrepreneurial Development Centers (EDCs) across the country to encourage and build capacity for business minded youths.

    He said: “Through the EDCs, we equipped them with requisite entrepreneurial skills to develop their concepts into businesses and effectively manage such businesses. Our financial inclusion strategy also provided for youth empowerment and access to financial services.”

    “This is because we see the link between entrepreneurship accesses to financial services. Towards this the bank launched its MSMEs Fund on Aug. 15, 2013.”

    The guidelines published on the apex bank’s website defines micro enterprise as sole proprietorships with less than 10 employees and total assets of N5 million excluding land and buildings; while SMEs are those with asset base of between N5 and N500 million and 11 and 200 employees. It also defines women-owned enterprises as those belonging to Nigerian women groups or individuals, or enterprises that are at least 75 per cent owned or operated by female Nigerians.

    Another N22 billion or 10 per cent of the fund is earmarked for social and developmental objectives, with N11 billion to be used as grants to develop the MSME sub-sector; another N6.6 billion as interest drawback programme (to settle rebates to customers of participating financial institutions who repay their loans as and when due); and N4.4 billion or 2 per cent for the managing agent’s operations (take-off) expenses.

    Afterwards, the CBN expects the managing agent to “to generate income from its operational activities to fund its future expenses on a sustainable basis.”The remaining N198 billion or 90 per cent of the fund, according to the CBN, will be used for the provision of direct on-lending facilities to participating financial institutions (PFIs).While N118.2 billion is earmarked for women entrepreneurs, the remaining N79.2 billion is for others.

    A further breakdown shows that N106.92 billion of the fund is allocated to women entrepreneurs; and the remaining N71.28 billion to ‘others;’ while another N19.8 billion is for refinancing guarantee, with N11.88 billion for women and N7.9 billion for others.

    Speaking with a cross-section of prospective beneficiaries, they confided in The Nation that the intervention fund was a right step in the right direction.

    Firing the first salvo, Mrs Lucy Kanu, the Chief Executive Officer, Lucy Initiative, Lagos, said the low interest rate would enable women to have access to loan facilities to grow their businesses.

    Echoing similar sentiments, Adaeze Victor of Global Women Venture, expressed optimism over the development but however noted that the modalities should be streamlined to encourage equal participation by the targeted group.

     

  • ‘SMEs still battling with teething problems’

    ‘SMEs still battling with teething problems’

    A lot of small and medium scale enterprises have been lamenting lack of support by banks. Mr. Ken Opara, Head of Small and Medium Scale Department of Fidelity Bank in an interview with Bukola Afolabi speaks on the challenges confronting SME’s and what banks are doing to ameliorate their pains  

    Small and medium enterprise remains the engine of growth for any economy. That much Ken Opara, Head of Small and Medium Scale Department of Fidelity Bank, admits.

    “They are very critical and in Nigeria for instance they represent more than 60% of the economy. If you will take countries like Singapore, Malaysia, and India that have developed SMEs still remain the engine of growth in those countries. They remain the major area of capital. It is an important sector of the economy that cannot be over looked, you are right to say that they have not been able to get support and I will quickly answer you by saying that it is also because of the way SME’s are structured in Nigeria.”

    He was however quick to admit that the problem confronting SMEs in the country are mostly structurally issues.

    “What I mean by structure is that they don’t have record of accounts, that’s also a key risk that is associated with it. There is not separation of the person from the business. The person that starts the business today is not also accountable and also doesn’t really understand how the business will be in the next three years. And for a lender, the first thing that occurs to a lender is that you want to do self lending and that is that why when they lend to you they want to be sure that when they have given out support that there will be return.”

    Expatiating, Opara noted that: “Unfortunately, a lot of them don’t even understand them, they don’t even have a website, there is no way the institutions will feel very comfortable whether international or local to provide support to them.”

    He also explained that Fidelity Bank has been a plc has a mandate to do business in a prudent manner with shareholders and all the stakeholders. “At one point CBN stipulated that we should support SMES, not only the initiative that has been put in place for there have also been intervention funds from other areas like the bank of industry. I think that for us as a bank we look beyond the statutory and we deal with the issue. So, with us as a bank we try to do things that would avoid people saying that we have limited them from having access to company. We have tried as much as possible to remove all those things. And that is why we have SMEs centers.”

    To create a conducive environment for SMEs what the bank does is “To take an advisory free of charge and we have one on one engagement and we call it hand-loading to understand what it means to be in business and to do proper record of account to help you set up an accounting record to help you build up those things and also to provide the luxury for you to help you understand how your business is structured. And so having done that we are then at the comfort level say yes we understand now where you are headed and also that the implication of this business and so we have also started to provide something bigger to them. For instance we first identify cluster of people who we can also provide funding support to. In terms of the 10% I don’t think it’s just the 10% that fidelity has done, if you ask me how well fidelity has done you will understand that they have done more than the 10 percent and we are also very aggressive and we also doing it to those that have the discipline to go through the fidelity process and that’s what we have been doing.”

    Next Opara informs that the bank is not an institution that is run on charity, it is also an institution that is run on capital will then favor the institution which they know.

    “The power sector for instance is been on the line when government decided to privatize it, fidelity has been at both ends. Fidelity if I’m not mistaken is a leading bank in the power sector and also the SMEs is that has also been, the distributorship then has also been and if you also see other banks that have succeeded in that area you will see that fidelity has, so I will rather say that part of the reason why SMEs hasn’t been able to acquire the required support is because of the way they are structured. And I say to you clearly we took a bold steps and today you will see what will happen in the one is that the power it will makes them not attractive like the foreign counterpart too because the cost of doing business is high.”

    Talking about is the challenges of SMES in Nigeria, Opara insists that having the right structure is a step in the right direction. “And with the statistics we have showed that within five years that most of the SMEs die and so in terms of structure they don’t have the right structure. They don’t have all the relevant areas, they don’t have an accounting record they also don’t have tangible asset. There is also key man risk because it revolves around one person and also do not have access to market for the nation and the way they are structured. Also they don’t have the access to short term loans. Most of this institution doesn’t have business plans.”

    While talking about some of the achievements recorded, Opara explained that: “We have been in the incubation period where we have problems and how to deal with that. And after addressing that we came up with what we call manage SMEs.

    This is essentially for building and managing entrepreneurs. The next generation of Nigeria that will then become the UAC and lever brothers and the concept of it is like taking them on an advisory to those things that can affect them from having access to funding to the market. Recently Fidelity partnered with US trade and investment, USAid commission for partners that are in Nigeria and this won’t have been possible if they we haven’t been able to give them access.

    Opara also uncovers some of the other opportunities available. “We are also collaborating with the British Council and they have come up with what they call free banking and of course the fidelity is small business account. The fact is that most of the SMEs that have their business are very high and the margin is very small. They are very sensitive and they don’t have opportunity and financial inclusion making them to come and provide them with small business account. And what that means is that they can do business without paying duty.”

  • Etisalat partners EDC on global entrepreneurship week

    Etisalat partners EDC on global entrepreneurship week

    Etisalat Nigeria in partnership with the Enterprise Development Centre (EDC) of the Pan Atlantic University, recently held the 2013 edition of the Global Entrepreneurship Week (GEW), targeted at youths and young entrepreneurs in the country, to help improve their chances of succeeding in their various chosen businesses.

    Head, Business Segment, Etisalat Nigeria, Mr. Bidemi Ladipo noted that it was important for business owners to have access to the right information needed to excel in business.

    “At Etisalat, we have been relentless in supporting initiatives that go a long way in assisting young people to achieve their dreams as regards successfully setting up businesses. Some of the initiatives we have used to help develop businesses include Market Access which is in partnership with SMEDAN, our Etisalat Easybusiness package which helps SMEs to communicate at a reduced cost and our recently launched promo called Easybusiness millionaire hunt which gives an opportunity for people with great business ideas to win as much as N2 million. This is the 3rd Edition of the Global Entrepreneurship week which we are sponsoring and we are satisfied with the level of impact these trainings have had,” he said.

    Also speaking at a seminar earlier organised for National Youth Corpers, Deputy Director, Enterprise Development Centre, (EDC), Nneka Okekearu expressed satisfaction with the improved turnout at the seminar.

    “It has become very obvious that our contributions to the Global Entrepreneurship are beginning to pay off. In the last three years since Nigeria joined the international event, we have had over eight events, over 50 local partners and more than 1.5 million people have participated at the events held in Lagos and Calabar,” she said.

    She also commended Etisalat Nigeria for once again partnering with the Enterprise Development Centre for this year’s edition.

    “I want to particularly thank Etisalat for the support they have shown to EDC in making this edition of the GEW another success. They have been with us over the years and have continued to demonstrate strong support towards young entrepreneurs,” she said.

  • Small business start ups tips

    Starting a small business is for many an irresistible challenge. Creating and running your own business can be immensely rewarding in various ways: personal fulfillment, self-discovery, financial independence, a way to make your mark in life, and also to make a positive contribution to your local community or chosen business area. While these lessons, tips and guidance give simple help on how to start up a small business in the third world, the principles and techniques – including the increasing use and success of micro-finance (also referred to as micro-loans or micro-credit) apply to starting a small business anywhere in the world. This free article and guide to small business start ups in the developing world has been contributed by Lynette Dobbin of the Microloan Foundation, which is gratefully acknowledged.

    Our modern lives and high-tech environments sometimes obscure the simpler values and lessons in life. These references points also help keep a humble perspective, and a straight and honourable path.

    We often think of the Third World – that non-specific catch-all term for countries we deem to be less ‘developed’ than ourselves – as somewhere that relies heavily on us for support. We offer them – sometimes slightly patronisingly – our superior skills, top flight technology and sophisticated expertise. And there is no doubt, as anyone who has ever visited the poorer parts of Africa and India will attest, that they do indeed desperately need our help.

    Many eminent institutions have developed their own reasoning as to why this should be. Dunn & Bradstreet for example believe that 90% of all small business failures can be put down to poor management, lack of planning, and under-capitalisation. Others highlight poor location, over-investment in fixed assets, and lack of experience.

    These examples come from the MicroLoan Foundation, a small UK registered charity, which has been helping people in the developing world set up small businesses since 1998. The charity provides the know-how, the start-up capital, and on-going support but the individual borrowers design and run the businesses for themselves. 97% of the loans are re-paid in full, a figure that most UK bank managers could only dream about. The 3% failure rate results from several factors, one of the commonest being that the borrower has died. With life expectancy of only 37 years, a high incidence of HIV/AIDS and malaria, it is a sad fact of life that some of the businesses will fail because of death.

    The following illustrates the key success factors in running these successful small businesses.

    •Background research

    Many businesses start ups fail because of inadequate market research. Overcrowded sectors, insufficient customer awareness, wrong location – the list of potential pitfalls is almost endless. In Malawi however the situation is very simple.

    There is not a great deal of choice available, because of course there would be no market for hi-tech wizardry in a village with no electricity, nor branded consumer goods for people who have never seen a television. So there is no temptation to come up with a revolutionary new concept, product or service and then try to find a market for it.

    People need food, and people need clothes, and to a limited extent people need things like fishing lines and firewood. Agnes Mwaremware lives in a village located 5 km down a deeply rutted dirt track. To get to the main road villagers had to walk this distance and then travel to the nearest trading centre crammed into the back of a heavily overcrowded pickup truck. One or two of her neighbours had invested in the ultimate convenience, an exceedingly elderly bicycle, but found themselves at a loss when the chain broke, or the brakes failed, or (as often as not) the whole thing fell apart. Agnes spotted her niche and now runs a stall supplying bicycle spares to her community. This is not the sort of market research that would move mountains, but it is nevertheless based on sound analysis and common sense. It is not surprising therefore that her business is doing well.

    •Legal position

    How often do would-be entrepreneurs come up with a terrific idea only to have it fail because they cannot negotiate change of use for a premises, permission for alterations or construction, or they fail to observe the necessary rules of environmental health and local planning requirements? In Malawi, no-one would dream of setting up a business before first consulting the local chief or village head man. True, this may be a matter of common courtesy rather than a legal requirement, but understanding the permissions that a business needs to trade is an important piece of the starts up framework. The same principles, although more complex and extensive (health and safety, equal rights, to name just two examples) apply in the developed world.

    •Location and route to market

    The choice of where to trade in Malawi is again governed by simple rules. It has to be somewhere that people can get to. It has to be somewhere that needs the product or service. And (importantly) it has to be somewhere from which the trader can easily obtain his or her raw materials or commodities. Often the simplest choice turns out to be best. Adija Msw for example borrowed £15 and started selling tomatoes on a makeshift table outside her mud hut. Her home is several kilometres from the nearest trading centre and in the middle of a well populated village settlement. She knew that she would have a ready market because her villagers often complained about having to walk into town to buy their supplies. Adija is Malawi’s answer to the corner shop and the profits from her business support a family of 12 dependents. She now sells fish and firewood as well.

    In the age of e-commerce and sophisticated distribution models, identifying a location and route to market is just as crucial for business start-ups in the developed world.

    •Small is beautiful!

    As the example from Adija’s business shows, it is not always either necessary or desirable to over-invest in fixed assets at the start of a business undertaking. Adija has had to expand her operation to accommodate the firewood but she has taken the simplest route again – she stacks it neatly on the ground.

    ‘Quality’ is often defined (quite rightly) as ‘fitness for purpose’. The lessons from Third World business start-ups are valuable ones for the developed world too – find common-sense solutions to business start-up and growth challenges. Unnecessary overheads will result in higher prices for your customers, so keep solutions simple and practical.

    Culled from www.microloanfoundation.com

     

  • Fumman lifts farmers’ associations

    Fumman lifts farmers’ associations

    FUMMAN Agricultural Limited, manufacturers of Fumman branded fruit juice has reiterated its commitment to investing in agriculture through its active collaboration and support for farmers.

    The company has since built a synergy of cooperation with several farmers groups through direct purchase of fruit crops in large quantities, among others.

    The Managing Director of Fumman Agricultural Ltd, Mr Emmanuel Adeyemi, who gave this indication recently, disclosed that the company also has a farmer’s support scheme in place where it ensures large purchase of farm produce to alleviate the sufferings of the farmers, a development, he noted, has impacted positively on the businesses of the farmers.

    Besides, the company also provides the planting materials and varieties that it has on its farm for collaborating farms and farmers groups.

    This collaboration and support, the Funmman boss noted, has enabled the company made significant inroad into agricultural research since agriculture is the backbone of the industrial sector.

    Expectedly, Fumman has also intensified its role through active collaboration with the Nigeria’s Agricultural Research Institutes as well as the Nigeria Centre for Genetic Resources Conservation and Biochemistry (NACGRAB), Nigerian Horticulture Research Institute (NIHORT).

    This collaboration, he stressed, has engendered the promotion of knowledge in the value chain of fruit crops research, planting, management, harvesting, processing and marketing.

    In genetic improvement, Adeyemi said Fumman has collaborated with Center for Environmental Renewable Natural Recourses Management Research and Development (CENRAD) and NACCGRAB. “Research is progressing on the popular “Ogbomosho Mango”, a preferred specie of Mango for Fumman Mango Juice with objectives of identifying inherent variations that can be genetically explored for genetic improvement of the crop, the propagation of identified desirable genotypes and to sensitize existing farmers and potential farmers to establish new plantation of the Ogbomosho Mango cultivation.”

    Beyond Nigeria, Fumman juice has preached its quality mantra to the West Africa sub-region. Fumman had presented papers at agricultural for a within and outside Nigeria from the viewpoint of private sector actor. We participated at the committee level of the Presidential Initiative on Dairy and Fruit Juices. And currently, our chairman sits on the chair of the ECOWAS Mango Stakeholders.

    Severally, Fumman Agricultural Limited has been recognised for its quality centric brand and indigenous collaboration. The award from Nucleus Estate Farmers group came in virtually every year. The Raw Materials Research Council gave Fumman the award for the best company utilizing local materials some years back.

    Adeyemi stated also that the organisation has adopted several strategies aimed at raising the bar of innovation through its deployment of modern technology and easy to use materials on its products. Fumman added the innovation of print on cans and easy-opening lids to its offer of fruit juices and canned pineapple pieces and slices, before progressing into cardboard packaging materials popular everywhere today.

  • GTB lifts SMEs at Lagos fashion exhibition

    GTB lifts SMEs at Lagos fashion exhibition

    As a demonstration of its commitment towards the development of the small and medium scale enterprises in the country, GTBank facilitated the GTB Lagos Fashion and Design Week recently.

    The essence of the exhibition, according to the organisers, was to present a perfect opportunity for fashion and fashion related community to show their work before a focused target audience, which holds a vital tool for the creative development of Nigerian creative industries.

    One of the exhibitors, St. David’s , experts in leather craft, with a special focus on shoes, opened its array of stylishly crafted leather products from shoes, bags, belts, wrist bangles and other custom leather products. There was a bespoke touch among the items shown.

    A few other labels alongside St. David’s at the exhibition include Nikki Khiran, Buttons, Republic of Foreigner, Mode Arts and Olanrewaju Lagos.

    Justifying his firm’s participation at the exhibition, Creative Director, St. David’s, said it was to create awareness for African shoe designs, in terms of quality and style.

    “We have come to show the public that leather items that can match world standard can be produced here in Nigeria. This is also reflected by the expression of awe shown by visitors to our stand. A lot of them have realised that their quest for Italian shoes was futile all along,” he emphasised.

    The St. David’s brand also gave an insight into its youth empowerment programme, which it runs in collaboration with a non-profit, nongovernmental organisation, Youth Concerns and Development Initiatives Africa.

    The aim, according to Davids, “Is to train young Nigerians on leather craft, at the end of which they would be self sufficient. We seek to admit young and vibrant school leavers who are passionate about carving a niche in leatherworks for themselves. Youth empowerment has always been our drive at St. David’s Skill Acquisition Training (SSAT). We help reduce the unemployment rate in our country, Nigeria and beyond.”

  • Group to train 100 youths

    Group to train 100 youths

    The President, Webisco International Federation of Nigerian Entrepreneurs of Tourism, Chief Margaret Fabiyi said 100 youths would be trained on how to prepare traditional foods.

    Mrs Fabiyi said in Abuja that the nation’s indigenous foods were going into extinction.

    According to her, the training which is free for the first 100 youths, is part of the company’s contributions towards improving the standard of living of the people.

    “The purpose of the training is for Nigerians and foreigners to appreciate and embrace indigenous meals, as well as for tourists and visitors to embrace our locally-made foods and for them to give the foods international recognition,’’ she said.

    Fabiyi said foreign continental dishes have taken over the traditional dishes, adding that “most Nigerians no longer want to eat traditional foods again’’.

    According to her, “all they requested for at the fast food joints are Chinese, Italian and Korean dishes which are not supposed to be.

    “Eating local and natural foods enhances longevity.’’

    Fabiyi said eating home-grown foods was a great way of celebrating the uniqueness of African foods.

    She described Nigerian delicacies as “highly nutritious, healthy, medicinal, readily available and easy to prepare”.