The Nation Newspaper

Tag: Small

  • FG to improve MSMEs’ access to business support

    FG to improve MSMEs’ access to business support

     

    The Federal Government says it is committed to addressing the challenges faced by Micro, Small, and Medium Enterprises (MSMEs) in the country.

    It said it would do that through interaction with entrepreneurs with relevant business regulations in form of clinic sessions.

    The Special Adviser to the President on Economic Matters, Dr Adeyemi Dipeolu, said this in Abuja on Wednesday at the two-day Nationwide MSMEs Clinic for the FCT, with theme “Nationwide MSME Clinics for Viable Enterprises’’.

    Dipeolu said the clinic was to address the challenges of MSMEs doing businesses in Nigeria, adding that similar clinics had been held in seven states.

    He advised the participants to take the advantage of the clinic to discuss with government agencies in charge of business issues.

    Dipeolu said that the clinic was to understand the challenges faced by MSMEs and also to create awareness on the standards of producing goods both for local consumption and exportation.

    According to him, the MSMEs clinics is an initiative of the Presidency, aimed at addressing problems of enterprises across Nigeria.

    The Managing Director, Abuja Enterprise Agency, Muhammed Arabi, said the clinic was not only bold but timely in view of the myriads of bottlenecks that MSMEs were encountering while starting up or growing.

    Arabi said until the government started seeing itself as agent for the growth of the MSME sector, it could not realise the expected potentialities of providing the needed result of jobs creation and  poverty reduction.

    He said that the universal belief was that small and medium enterprise sector was a major driver of the economy.

    Arabi said the convergence of all relevant ministries, departments and agencies to give solutions to the problem, respond to inquiries and provide the needed information would definitely lead to the success of the initiative.

    He said the country was lagging behind in spite of the MSME sector holding 96 per cent of the business sector in Nigeria compared to 53 per cent in the U.S. and 65 per cent in Europe.

    Arabi added that with the employment capacity of about 33 million people, it only contributed 48 per cent of the Gross Domestic Product of Nigeria, compared to nations on the same status in Asia.

    “We therefore owe this nation a duty and the MSME sector in particular, as stakeholders, to move from this poor status to catch up with the fast moving would.’’

    At the interactive session, participants complained of lack of finance and that most banks asked for impossible collateral.

    He also complained of lack of patronage from Nigerians who preferred to buy imported products.

    The Deputy Director, Development Finance Department, Central Bank of Nigeria (CBN), Mr Osita Nwanisobi, advised entrepreneurs to always pay back loans collected from banks.

    Nwanisobi said most banks faced the challenges of people not returning the loans they borrowed to give other customers.

    He said that CBN always sanctioned banks that failed to do the right things concerning loans for MSMEs.

    “We monitor the commercial banks because there are guidelines for the interventions,’’ he said.

    According to him, CBN is ready to provide avenues for upcoming entrepreneurs to easily access funds to either set up or expand their various enterprises.

    “CBN is focused on enhancing capacity utilisation, increasing output of goods and services, boosting job creation and increasing foreign exchange earnings,” he said.

     

  • MasterCard eyes 40m small merchants

    MasterCard eyes 40m small merchants

    MasterCard has set a goal to connect 40 million micro and small merchants to its electronic payments network within five years. This expands on the company’s Universal Financial Access 2020 commitment made last year.

    To date, financial inclusion has been predominantly centered on providing the underserved and the unbanked with tools and transaction accounts. This remains a critical need with two billion unbanked people, the majority of whom are women, forced to operate in a cash economy. In order for financial inclusion efforts to truly have an impact, there needs to be an equal focus on both access and usage.

    Since 2013, MasterCard has delivered programs and services to more than 200 million people previously excluded from the financial mainstream. The company is committed to reaching at least 500 million by 2020.

    Through broad-based collaboration with public and private sector entities, MasterCard is bringing the benefits and security of electronic payments to the unbanked around the world. In Rwanda, MasterCard is collaborating with the government to fast-track the country’s move to include 90 percent of its citizens in the financial mainstream, as set out in its Vision 2020 strategy.

    In Egypt, MasterCard is helping the government roll out a digital ID program that links citizens’ national ID to the existing national mobile money platform, allowing 54 million Egyptians to participate in the formal electronic economy through a single, easy-to-use cashless programmes.

    In Bangladesh, bKash, Western Union, BRAC Bank and MasterCard launched an international remittance service that gives bKash’s 22 million registered customers the ability to receive international remittances directly into their bKash mobile wallet.

  • Rekindling hope in small scale farming

    Rekindling hope in small scale farming

    While agriculture remains central to Nigeria’s economy, its performance has lagged. The relatively low rate of agricultural productivity is caused by many factors, including poor seeds and fertiliser supply. Micro Reforms for African Agribusiness in Nigeria (MIRA-NIGERIA), in collaboration with Nigeria Agricultural Business Group (NABG) and other stakeholders, is taking steps to strengthen public-private implementation partnerships to improve food production. DANIEL ESSIET reports.

    Life is improving for many farmers in Bauchi State and other parts of the North due to private efforts supporting local agriculture by the Nigeria Agricultural Business Group and other organisations. The establishment of new food processing businesses and farming ventures in the region has forged new pathways for rural families to stay on the farm, attracting new producers to farming and food-related businesses. It has also brought about a new appreciation for rural production and entrepreneurship among food companies, large and small.

    But the situation has changed in  the last three years. This followed the insurgency in the North-east, where farmers are unable to cultivate their land. The threat forced them to abandon their fields. In most cases, the insurgents destroyed infrastructure, increasing the suffering of the people.

    The hike in fuel, fertiliser and labour prices, occasioned by Boko Haram attacks, didn’t help the situation. The situation was pretty chaotic with all crops. Significantly, the overwhelming insecurity broke the supply chain and farmers couldn’t overcome the perils and costs of cultivating in a conflict zone.

    Other problems were input, such as seeds, and then there is the issue of transport and distribution.

    Lamenting the situation, the Coordinator, Nigeria Agricultural Business Group (NABG), Mr Emmanuel Ijewere, said farmers in the North are facing a big challenge  of having  to transport their products over roads that have become battlegrounds.

    Addressing a stakeholder’s consultative workshop on Micro Reforms for African Business in Nigeria (MIRA) in Lagos, Emmanuel Ijewere said tackling insecurity in the Northeast has become a critical issue for the government if it is to help frightened farmers willing to step up output to boost food production in the midst of increasing security threat.

    Calling on the government to boost security to help farmers keep their lands in production and prevent the situation from deteriorating, Ijewere added that food markets and distribution systems have been severely disrupted.

    With targeted support and favourable policy conditions, he expressed hope that farmers could increase their productivity and contribute to hunger and poverty reduction goals. He stressed that improved government’s investment in smallholder farming, will result in increased agricultural productivity and output.

    In the era of planned development, Ijewere wanted commercial banks to play an active role in the agric development process rather than being a passive agent for providing financial services.

    For him, Nigeria provides huge opportunities for food supply chain stakeholders.

    To this end, he said NABG is partnering with MIRA to support government to make and implement policies that will help farmers improve yields and increase profitability.

    On security of input meant for farmers, the Director, Farm Input Support Service, Federal Ministry of Agriculture and Rural Development, Mr Jatto Ohiare said the government was making efforts to address security challenges by providing escorts to accompany farm input to farm locations in threatened areas.

    The National Coordinator, MIRA-Nigeria, Dr. Tony Bello, noted that some of the challenges the farmers were facing include poor access to capital, poor infrastructure, inadequate market structure and low levels of public investment – all exacerbated by ineffective policy making and implementation.

    Faced with these challenges, he stressed that improving policy-making is imperative.

    He maintained that the purpose of MIRA is to promote policy formulation that will transform agriculture to a ‘productive, high-value, market-orientated’ sector through a number of interlinked interventions and policy reforms. These, he listed, to include the intensification of crop production, the organisation of farmers into cooperatives, and facilitating access to inputs.

    Consequently, the Alliance for a Green Revolution in Africa (AGRA) has formed new implementation partnership platform with NABG, Seed Association of Nigeria (SEEDAN) and Fertiliser Suppliers of Nigeria (FEPSAN) on micro reforms, especially for smallholder agribusinesses in Nigeria.

    Bello said AGRA is committing $700,000 to Micro Reforms for African Agribusiness in Nigeria, an  initiative that  will boost the operational position of small farmers in business.

    Bello said by working with Federal Ministry of Agriculture and Rural Development, NABG and others, AGRA could help facilitate micro reforms for agribusi-nesses as it affects smallholder farmers in the country.

    Former Head of Agric Finance Department, FirstBank, Ernest Ndubuisi Ihedigbo, stressed the need for the government to promote an integrated approach towards addressing constraints on the agricultural extension system.

    On financing agriculture, he said the nation has a robust finance system that is positioned to support the financing of smallholder enterprises.

    The Executive Secretary, Seed Association of Nigeria (SEEDAN), Alhaji Ibrahim Abdullahi, restated the commitment of the association’s members to continue to support the current drive towards boosting agricul­ture in the country.

    He assured that the association’s members were capable of producing seeds to meet national needs, thereby guaranteeing food security in Nigeria.

    He reiterated readiness to support reformed policies and regulations to local and international private sector investors in order to create awareness about improved business enabling environment in seed production and supply.

    Executive Secretary, Fertiliser Suppliers Association of Nigeria, (FEPSAN), Alhaji Ahmed Rabiu Kwa said there are efforts to promote better access of small farmers to fertiliser.

    Senior Manager, Sales and Marketing at TAK Agro & Chemicals Limited, Gideon Negedu, said better access to credit, for smallholder farmers, could bring about a revolution in agriculture.

    Among others issues, the workshop urged the government to strengthen cooperatives as a vehicle to extend credit to farmer groups.

    The workshop recommended the creation of an efficient system of agricultural finance and the development of a sound co-operative credit structure.

    The workshop recommended the establishment of a private sector driven agric bank to meet agricultural credit needs. Several speakers during the forum focused on improving agriculture financing, promoting sustainable and equitable agriculture and rural prosperity through effective credit support, related services, institution development and other innovative initiatives.

  • How small retailers lure shoppers

    In their quest to carve a niche for themselves, many small retailers out there have devised ingenious means and ways of getting and retaining customers, reports TONIA ‘DIYAN 

    For many startups in the retail business, the fear of competition from the bigger retail outlets is real.  Usually, the comments you hear often, range from,  “the big stores are taking over the small ones; how will I cope when the bullish stores have everything it takes to run the business, including sourcing for products at the cheapest possible rates.’’

    It is true that as shoppers become more value focused, they turn towards big-box retailers thereby making small retailers boost sales by targeting wealthier shoppers who are less price-sensitive and are willing to pay premiums for better service. Findings have shown that upper-income households often display unique perception of value than lower-income shoppers.

    But thankfully, some small retailers have since found answers to some of these worries by employing time-tested and simple success strategies.

    Success strategies that work

    As small retailers, they really cannot win price wars against the bigger chain stores. But what they need to leverage on over the chains, is  personal relationships with customers and the ability to deliver superior service. These and many more are some of the secrets of many successful retail businesses over the years.

    Alhaji Rabiu, Chief Executive Officer, Brazilian Jewelries Store, who has been involved in the retail trade over the years, shares his perspective.

    Waxing philosophical, he said, the best way to woo and retain customers is to constantly be in their mind.

    “If as a retailer, I am savvy and communicate well with my customers, I can draw them into my store before they go into the national chains. One way to do that is through attractive discounts and cutting-edge  prices across board, this for sure, will encourage loyal customers to spend more. That is a lot smarter than putting a 70 per cent off sign in front of my store,” he said.

    For independent retailers to compete with their larger counterparts in whatever market they are targeting, retail experts’ advice small retailers to encourage their best customers, maximise the one-on-one personal relationships that they have with customers, saying it is the secret weapon they have against big national chains.

    Through attractive programmes, experts say retailers can strengthen their relationships with their best customers, and as well appeal to those shoppers’ bargain-hunting mood at the same time.

    Beyond customer service, experts say small retailers need to keep inventories lean to keep costs down. They say it is important that these small store owners are vigilant in refusing late orders and that they should avoid over-shipments to avoid having merchandise they would not be able to sell.

    In addition,  small retailers have been advised to take a cue from large chains that display as much merchandise as possible, by displaying theirs on the shop-floor, rather than holding inventory in the stockroom. This expert advice will increase their advertising spending, though to a smaller extent. Many small stores now cater for more affluent customers which will make them do better.

    Small stores have also been advised to watch their staffing levels to control costs. They should adopt the strategy to staff to the peak hours as much as they can, especially in the evenings and at weekends, as most busy families have little time to shop during the day. Businesses, experts advise, might decide to open earlier in the morning and extend hours at night to reach more customers, unlike the big retailer who has opening and closing time.

    Big retail stores slash prices and increase advertising budgets whenever sales are low. But many small retailers without the same financial muscle are stepping up efforts within the limit of their resources to attract customers.

    Analysts have maintained that the existence of the informal retail sector would not be threatened by market circumstance, but rather, operators would bring in innovations to retain their market share.

    They have also presumed a situation where the small shops will sustain their dominance with the ability to offer lower prices than the big shops who have invested much to achieve international standard. And these are already playing out.

    An expert on retail practices, Ivan Friedman, once said: “The ability of small stores to react quickly and directly to customers may be one of the most effective weapons they have. They can easily determine what is selling, and then place orders without wading through a cumbersome bureaucracy. They don’t have to go to the corporate office, wait for their request to be analysed and then ship to them.” There is need to stress the fact that “small shops” and “big shops” are rather indistinct and that the classification of a unit of business as big or small is different in different places and has changed significantly with the passing of time.

    Big retailers suffer from high operational costs. However, the illegality of the operations of the small shops puts modern grocery retailers at a distinct disadvantage. Modern retailers have higher fixed costs; they cannot easily evade taxes because of their visibility and they have to source their supplies from legitimate channels.

    Analysts have maintained that the existence of the informal retail sector would not be threatened by market circumstance, but rather, operators would bring in innovations to retain their market share. They have also presumed a situation where the small shops will sustain their dominance with the ability to offer lower prices than the big shops who have invested much to achieve international standard. And these are already playing out.

  • ‘How to build small brands up to global status’

    ‘How to build small brands up to global status’

    Some start-ups are scared of hearing the word branding when advised to engage it for their businesses.

    They think branding and positioning should only be explored by top brands, such as Coca Cola, MTN and others.

    In the words of the convener of Brand Forum and Chief Executive Officer, Thots ‘n’ Works, Mrs. Ogunleye Ayanfeoluwa, most of the start-ups demarket their services by “exchanging with clients poorly designed complementary cards that looks like a photocopied item.”

    These, according to her, are some of the orientations that make start-ups remain small players till they are run out of business  by smarter ones who understand branding.

    “But they fail to understand that small businesses too should brand and position for business growth to attract good customers,” says Ogunleye.

    However, with the recession trailing most big businesses, experts at a just-concluded Brandforum, a free enlightenment forum for SMEs, said this is the right time for small business owners to brand their products and service to attract big clients who need affordable services.

    At the forum, the Executive Director, Rainoil Limited, Godrey Ogbeche, who delivered the keynote address titled: “Start small, grow, big”, urged business owners not to be deterred by the state of the economy.

    “Most things grow big start small. Businesses like seeds have to endure a period of heat and harsh conditions in before they make head way and become big enterprises and conglomerates that people appreciate today.

    “Most of the advanced economies that we know of today are supported by hundreds of thousands of small businesses that employ more people and grow their countries’ GDP. So, be ready to start small now and grow big gradually,” Ogbeche advised.

    -Besides, Ogbeche noted that to attract the right clients, start-ups must have drive, passion, discipline, integrity, dedication and also understand relationship management skills.

    To start out small, she urged SMEs to be sure of their value proposition; get adequate knowledge about the products and services and the industry they operate in as well as avoid loans to finance their start-ups or assets.

    Drawing from her personal experience of starting Rainoil with her husband in 1994 with N300,000, Ogbeche stated that the first step to growing big for SMEs is strategic planning, just as she explained that each entrepreneur must decide what being big is for him or her.

    Also, Ogunleye urged SMEs to brace up in spite of the dwindling economy because it is their “finest hour” to compete and grow.

    Also, the Chief Executive Officer, Thistle Praxis Consulting, Ini Onuk, while fielding questions from the audience comprising business owners,  warned that each business owner must be ready to operate by principles of integrity in business dealings, adding that training staff is not an option even if many leave immediately after receiving advanced training from their employees.

    “For me, we sign a bond of about two years with any staff we are going to train. We can’t just train you and you leave. We have even trained others overseas in the past and they resigned immediately they returned from the training,” she said.

    At the public presentation of the  book written by Ogunleye titled: “What Mr Zack taught about Business and Life”, Onuk enjoined SMEs to buy the book as it contains many real life nuggets of running a business in Nigeria.

    Ogunleye also announced a branding makeover for three SMEs selected by her firm. She handed  them over to mentors who will help them grow.

  • ‘How to boost small businesses’ performance’

    In order to boost the efficiency and performance of Small and Medium Scale Enterprises (SMEs), the Association of Chartered Certified Accountants (ACCA) recommended the introduction of a flexible corporate governance framework.

    The group in its report titled Governance for All: the implementation challenge for SMEs, noted that the one-size-fits-all approach to corporate governance will not work for small businesses because their needs are vastly different from bigger corporations.

    It stated that corporate governance in larger organisation ensures that management acts as shareholders’ agents, for SMEs , it entails improving business performance and managing risks.

    The findings of the report include clear reporting lines and clarity on decision making and ?risks control, as well as on other matters that need to be brought to the board’s attention for review or approval.

    It added that the framework should promote understanding of roles, responsibilities and limits of each person’s job, and show board the balance of an organisation such as risk and reward.

    The report further noted the need for clear communication by board to management and staff about issues such as strategic goals and expected behaviours, adding that any incentives for staff need to be supportive of board strategies.

    The Chair, Global Forum for SMES, Rosanna Choi while reacting to the report said the framework of corporate governance needs to consider the diverse needs of SMEs in order to work for small businesses.

    “SMEs need to realise the potential benefits of implementing corporate governance within their businesses.

    “But equally, governments, advisors and other stakeholders need to realise the challenge for SMEs is that established corporate governance frameworks have been developed with large, listed companies primarily in mind. Such frameworks and codes may not reflect the realities of running a small business.

    “Governance issues are nevertheless of critical concern to small businesses, where owners may often be its managers as well, or where company ownership may be shared across family members.

    “Sometimes the line between business and personal interest can be blurred. Corporate governance should establish clear roles and responsibilities for each individual and as such is relevant to businesses of all sizes.

    ”For corporate governance to work in small businesses the framework needs to take into account the diverse needs for them-they are not all run in the same way.

    “Advisers and international institutions such as ACCA, need to also help by campaigning for the cause of why corporate governance matters to SMEs-this is vital for creating a receptive environment and overcoming barriers to action,” the reort quoted her to have said.

  • ‘She was small but mighty’

    ‘She was small but mighty’

    A funeral service for the former Managing Director of the News Agency of Nigeria (NAN), Dame Oluremi Oyo, was held at the St Dominic’s Basilica, Yaba Lagos, after a weeklong series of events. NNEKA NWANERI reports.

    The left big footprints in the sands of time as she lived a life worthy of praise and emulation. The former Managing Director of the News Agency of Nigeria (NAN), Dame Oluremi Oyo, died on October 1, in the UK, where she was receiving treatment for a cancer-related ailment. She had looked forward to her 62nd birthday on October 12, before death struck.

    Dame Oyo began her journalism career in 1973 in the then Nigerian Broadcasting Corporation (NBC) now known as the Federal Radio Corporation of Nigeria (FRCN).

    On October 13, a commendation service held in her hometown at St Joseph’s Catholic Church Usi, Ekiti State;  and on October 16, a Requiem Mass at the Church of Assumption, Asokoro, Abuja in her honour.

    The media had a night of tributes and Papal Knights and Medallists also organised a service of songs for her. The solemn songs reminded many of eternity.

    There were reminisces of her life and times last Friday during a funeral service to bid her goodbye. Her husband, children, in-laws and associates were there in their numbers. The management and staff of NAN were in uniformed purple Ankara chosen for the occasion

    Even the Catholic Priests all, had their cassocks sewn with the purple material from the ankara.

    In a sermon by the Parish Priest of Ss Timothy and Titus Ijegun, a Lagos suburb, Rev Jude Abulu urged the mourners to celebrate, rejoice and thank God that she has gone to a better place of rest, where there are no sadness, sickness and sorrow.

    He said because she was and still many things to many people, there are a lot of lessons to take from her life.

    “She was small, yet mighty. She was one who took note of small details and was one lover of nature and life itself.

    “I can still remember her voice when she speaks or laughs and it is memories such as these that we should keep dear to us because she loved to love; was compassionate and accepted the things of life as they  were,  naturally becoming a philanthropist with her life and family and lived her life in the name of Christ. That was why she gave it all to her work, church and family.

    “She told me once with tears that she was happy to receive the Lord during her Communion rounds. She has left a mark on us.”

    He urged all to learn from her dedication and how she accepted all that came to her including her death.

    “What about you?” Fr Abulu asked.

    The cleric also spoke of the late Mrs Oyo’s days and her humble background noting that she sold akara (bean cake) after school hours those days. “She even assisted her parents in selling bread and puff puff in a moving train.”

    President Goodluck Jonathan in a condolence letter to the family, described the late NAN boss as an epitome of the highest ideals of journalism and an archetypal professional, whose life should provide succour and inspiration to all who have crossed paths with her.

    Former President Olusegun Obasanjo, whom she served as his Senior Special Assistant on Media from 1999-2007, said the late Remi earned his recognition and admiration.

    He also described her as dutiful and hardworking and a woman loyal to the core. “Ever resourceful, trustworthy and conducted herself with humility” Obasanjo said.

    In attendance were Frank Nweke jnr; President of the Nigerian Guild of Editors Mr Femi Adesina; Lanre Idowu, advertising guru Biodun Sobanjo;  past governors of Ekiti Dr Kayode Fayemi and Segun Oni and their Osun State counterpart Prince Olagunsoye Oyinlola.

  • Kudos to small scale enterprises

    The recent revival of support by the federal government for small scale entrepreneurs through a 220 billion naira intervention fund referred to as the micro, small and medium enterprise development fund (MSMEDF) deserves all the encouragement. To further this cause to entrench the micro, small and medium enterprises (MSME), well beyond the current efforts, the federal government should as a matter of priority establish a Ministry of micro, small and medium enterprises, to galvanize and concentrate enough bureaucratic efforts to grow this important segment of our economy.

    Interestingly under this fund, the federal government through the Central Bank of Nigeria is working to eliminate gender disparity in the MSME sub-sector. So at the lunch of the MSMEDF on August, 15, 2013, the Central Bank of Nigeria, earmarked 60% of the 220 billion naira seed capital for women, while 40% is for men. The program defined a woman enterprise as one that is at least 75% owned or operated by female Nigerians. The fund has two main objectives. First is the social/development object and grants which account for 10% of the fund. The second objective is commercial which accounts for 90% of the fund. Also it provides that 80% of the monies in the commercial component of the fund will be allocated to micro enterprises and 20% to small and medium enterprises.

    The guidelines defined micro enterprises as one with less than 10% employees with a total asset of less that 5million, excluding land and building, and operated by sole proprietor. Small and medium enterprises are defined as entities with asset base of more than 5 million and not more than 500 million, excluding land and buildings, with employees of between 11 and 200. The businesses covered by the fund are listed as agricultural value chain activities, trade and general commerce, cottage industries, artisans, services: hotels, schools, restaurants, laundry, etc, and other income generating projects as may be prescribed by the managing agent.

    The channel for distribution of the fund is from the CBN to the participatory financial institution (PFI) and then to the MSMEs. PFIs include micro fiancé institutions (NGOs and financial cooperatives) and finance companies that meet the criteria. Quite a number of banks have keyed into the program and have designed gender related funding programs to tap into the CBNs plan of action. The interest in female, while seeking to engender gender parity in business ownership, may actually be tapping into to the well heeled notion that women are more trustworthy than men, in this case as borrowers. After all, according to Petrokis and Kostis (2012); while empirical results indicate that inter personal trust dose not affect the number of SMEs, trust becomes widespread in a society when the number of SMEs is greater.

    As I had posited at the beginning of this piece, there is the need to create a ministry for MSMEs, which will be charged to push for the institutional reforms that will help the sub-sector to make the needed impact in the economy. This is the case in other developing economies, where institutional support is developed, to make similar fund more effective. Some of the support includes organized cluster based approach to lending, which the minister of finance Dr. Ngozi Okonjo-Iweala has pushed for among some industry operatives. A cluster based approach has been shown to be more beneficial in dealing with well define and recognized groups, the availability of appropriate information for risk assessment, monitoring by the lending institution and reduction in costs for borrowers.

    Another institutional help to the MSMEs will be the creation Credit Guarantee Fund Trust, as a counter poise to lending without collateral. Under such scheme, the lender concentrates effort on project viability, and so the security is secured purely on the primary security of the asset financed. As practiced in other jurisdiction, the Credit Guarantee Trust Fund is structured to minimize the risk of the lender and assure him that in the event of failure by the borrower to meet his obligation, the Fund will step in to ameliorate the loss incurred by the lender. In turn the Fund is paid guarantee and annual service charge by the MSMEs.

    Another institutional help to maximize the benefits of MSMEs is the use of credit ratings in risk assessment. Where there is a reliable credit rating for the MSMEs, the lending institutions find it easier to make their decisions, especially when lending without collateral. Credit rating may also be useful in determining the interest rate for both the lender and the borrower, as MSMEs with favourable ratings may likely get better lending rates than those with poor ratings. Associated with credit rating will be a credit bureau which the Central Bank and the financial institutions are already building, which will keep the data on the borrowing characteristics of companies and individuals, which ordinarily is a sine qua non to the very survival of the lending institutions themselves.

    A further bulwark to protect the new national wave for MSMEDF will be the establishment of laws to protect the MSMEs from their customers, with respect to payment for supplies and for services. Such laws will impute into contracts, where there are no provisions, mandatory payments for services and goods on the due date, and for penalties to accrue to the benefit of the supplier or service provider, after a named date. In some cases the banks will be under legal obligation to pay the supplier or service provider from monies of the benefiting companies in their custody. This will save the MSMEs from the debilitating legal challenge to recover monies due to them from the courts. Also the laws can provide for arbitration and mediation, where there is a dispute in place of litigation. No doubt, the benefits of a viable MSMEs sub-sector are indeed innumerable.

  • Small business owners decry rates

    A group of small  business  owners are demanding  reforms of the business rates system  to  provide a competitive environment where small and medium enterprises  can thrive.

    The group, Association of Micro Entrepreneurs of Nigeria (AMEN),  highlighted  the problems caused by business rates, and requested that the government  commit to a “fundamental review” of the system.

    Its President, Prince Saviour Iche,  said  small  business owners   want  the  government’s economic plan to continue to support small businesses, while looking ahead to business rate reform.

    This, Iche  explained,  should be in form of lower taxes  to support  small businesses and   local shops.

    He argued that  business rates review should  consider options for longer-term administrative reform of business rates that balance the need for the system to deliver simplicity, fairness, stability and predictability to ratepayers.

    According to him, business rates have put a disproportionate burden on small and medium enterprises (SMEs).

    Recognising   that small and medium businesses are a key part in building a stronger economy, he  urged  the  government to   take action to limit business rate increases to  provide a competitive environment where SMEs  can thrive.

    He   took  a  gloomy view of the impact of an interest rate rise, adding  that an interest rate rise might tip the balance for struggling companies that are right on the edge.

    According  to him, interest rate rise has  made a tight situation  for  small businesses, adding  that  the majority of the  businesses have  continue to fight on despite the challenges  of the  tough  operating  environment.

    According to him, operational and financial fitness are vital to ensure companies make the most of any top line growth and attract investment.

  • Making fortune from breeding small animals

    Making fortune from breeding small animals

    Keeping small livestock can be profitable provided you have to choose the right species. DANIEL ESSIET reports.

    f young people are going to be brought back into farming, it will be now. The opportunity to make money from small farming has never been better, especially with grass cutter and rabbits bringing returns that translate to higher net income for the owner. While other enterprises in agriculture look promising, keeping small animals is the best place to start.

    Prince Arinze Onebunne is a small livestock farmer. He rears rabbits, grasscutter, guinea pig, antelope and white rats, from which he earns enough to cater for his family including educating his children. He deployed his piece of land and some little resource in this venture, which he has grown into a multi-million enterprise.

    At his Jovana Farms, Onebunne breeds animals and also teaches people how to invest in grass cutter, mushroom, snail, fish, quail, geese and rabbit business. According to him, investing in grass cutter is a wise choice because it is a prolific animal. He explained that the female grasscutter litters twice a year and one female can litter as many as eight young ones at a time if well fed.

    “If a farmer, therefore, starts with say two colonies of eight females and two males, if the females litter twice a year, given an average of seven per female, you have 7x8x2, which gives 112 grasscutters in just one year,” he explained.

    For him, the capital requirement for grasscutter rearing is very low compared to the huge return on investment. With less than N70,000, you can kick start your grass cutter farming using cheap wooden cages and some space within your house. Feeding grasscutters is relatively cheap as they stay feed mainly on grass and vital supplements and give good return to the investor.

    Yet, the market is large, waiting for any intending farmer to start tapping from it.

    “You can make up to N300,000 from one female grasscutter alone and when it has completed the breeding circle in four years, you can still sell it as a big bush meat.

    Grasscutters are weighed before being sold. When they get to table size, you can dispose one for between N5,000 and N10,000, depending on the size. One kilogramme of grasscutter is sold for N2,000. Other areas one can make money in grass cutter farming are by breeding and supplying breeding stocks to farmers, selling table size live or smoked grass cutter to hotels, homes, schools, restaurants, relaxation centres, and so on,” he explained.

    Onebunne has become an authority in the sector, studying the animals’ behaviours and learning how to treat their illnesses. A lot of his friends have bought small animals after seeing how his farms kick-started his family’s climb out of poverty. For him, small animal farming is fascinating.The only thing is that it requires continuous hardwork and devotion without any distraction. The rabbit business, he said, is attractive, where a young person with ingenuity can get a start with a few rabbits and grow his stock within six months. He sees potential for an income that competes with the city job from a standard mini livestock farm. But managing grass, costs, and markets plays a key role in determining the level of profit producers can expect. If one decides to keep livestock on the farm, one needs to choose species that you are able to care for. With more than 10 years in agriculture business, Onebunne has a wealth of experience which any one keen on making money from animal rearing can tap from and rake profit.

    But like every other businesses, small animal farming has its own challenges. These include climate change, breeding location, feed supplies and funding.

    “If you really desire success in this line of business, you have got to be passionate so that you can turn your challenges to opportunities for great achievement,” he advised.

    Jovana Farms organises sensitisation training and seminars nationawide on how to make it in small-scale animal farming.

    He advised enthusiasts to visit www.jovanafarms.com for more details.