The Nation Newspaper

Tag: SMEs’

  • ‘African SMEs have boundless opportunities’

    The growth in sub-Saharan Africa offers African small and medium scale enterprises (SMEs) opportunities in 2014, as the International Monetary Fund (IMF) expects economic growth in the region to be slightly higher than of that in 2013, at six per cent.

    This is coupled with more than one billion consumers on the continent who spend $600 billion yearly, with the fastest growing middle class in the world and the significant opportunities in connecting with the world.

    Managing Director, DHL Express SSA, Charles Brewer, said that SMEs are the growth engine for Africa and the critical driver for sustainable economic growth.

    “According to Deloitte, Africa’s middle class has tripled over the last 30 years, and the current trajectory suggests that the African middle class will grow to 1.1 billion in 2060.

    As African economies are some of the fastest growing in the world, the outlook for the continent is very positive going forward.

    “Manufacturing, on a large scale, is still somewhat embryonic in Africa and as such, there is a definite opportunity for SMEs to fill the gaps which are not being serviced by these large global companies. As important, a growing SME base will create hundreds and thousands of new jobs, which is an absolute must for this ever growing continent.”

    Brewer said other than the usual challenges that SMEs are likely to face in Africa, such as infrastructure challenges, customs regulations and controls, access to finance may be an obstacle going forward.

    “The Institute of International Finance reported that due to many countries in Sub-Saharan Africa struggling with controlling price pressures, central banks have tended to keep monetary policy fairly tight. Despite this challenge, we expect SMEs to create growth opportunities through increased consumer spending power and expansion into untapped markets.

    “The growing internet user penetration in Africa also provides a sizeable opportunity for SMEs, and as Africa continues to adopt e-commerce as a way of life, businesses are able to leverage this online market, while reducing traditional customer acquisition costs.” World Wide Worx’s 2012 Internet Matters report reveals that the local e-commerce market is growing at a rate of about 30 per cent a year and shows no signs of slowing down.

    The findings of the 2013 National Small Business Survey, conducted by the National Small Business Chamber (NSBC) revealed that the key need expressed by SMEs includes expanding customer base, increasing sales and going global.

    “Accessing new markets by trading across borders is the key to growth and competitiveness and the key driver for small and medium enterprises in South Africa,” says Mike Anderson, NSBC founder and Chief Executive Officer (CEO).

    Brewer said the more an SME can tap into global opportunities and the more it can look into global expansion, the better the chances for growth become.

    “When it comes to global opportunities the key to success for many SMEs is knowledge. Knowing which markets to target, how to market their product, how to identify customers, how to get paid and critically, how to ship globally. We have 25,000 SMEs who work with us across Africa and every day we work on understanding their needs better and help them to go global. DHL is well-positioned to partnering with African SMEs and helping them to connect with the world – so I ask you, what are you waiting for?” Brewer added.

     

     

     

     

     

     

     

  • Banks’ roles in SMEs’ lending, economic growth

    Banks’ roles in SMEs’ lending, economic growth

    Small and Medium Enterprises (SMEs) have been tipped as key players in Nigeria’s growth and transformation project. However, achieving this feat would require banks to give the subsector the needed support through funding and skills development. First Bank Nigeria says it has taken steps, including an alliance with CNN’s African Start-Up show, to help SMEs achieve their growth potentials, writes COLLINS NWEZE.

    Potentially, Small and Medium Enterprises (SMEs) remains a key driver of the Nigerian economy. The challenge however is that not too many banks are willing to lend to the subsector. Over the years, when the loans come, they are priced higher than what obtains when lending to multinationals or other operators in the real sector of the economy in most cases. Determined to reverse the fortunes of the subsector, First Bank of Nigeria Plc has reiterated its commitment to providing cheap and long-term funding for SMEs in the country.

    Gbenga Shobo, Executive Director (Retail Banking South), who gave this indication during the maiden edition of the bank’s SME conference, titled “SMEConnect”, reiterated the need to create successful SMEs that would help the economy achieve its full potentials. “Definitely there is a lot of large buzzword right now, as a lot of banks are saying they want to do SMEs finance. But we have been relatively successful in financing SMEs. A recent survey shows that the efforts of First Bank in this regard more than double those of any other bank in the last three years,” he said.

    He said that presently about 50 per cent of the funds of the lender come from retail banking. “Those funds are from our SMEs, our affluent and our mass market. Retail banking is split into those segments. The Cash Reserve Ratio (CRR) itself doesn’t affect retail banking directly because it was meant for public sector funds. But it shows how more important to the banks the funds from retail banking would be because no CRR affects it. So obviously there is more focus on retail banking funds. So that is why we are doing more to get more SMEs,” he said.

     

    African Start-Up project

     

    As part of its strategic focus to grow and sustain the development of SME’s in Nigeria and Africa at large, the bank, through its SME support programme, SMEConnect, which is sponsored CNN’s African Start-Up show, is exploring how ideas are generated, formulation of business plans, and access to capital and product development amongst other things. African Start-Up is a 30-minute programme, which follows entrepreneurs across African countries to see how they are working to make their dreams become reality. It offers viewers the opportunities to see entrepreneurship in a broader perspective, with each show dedicated to an entrepreneur taking viewers through daily challenges.

    The programme tries to highlight the fact that the rules of entrepreneurship are not defined, its setbacks are frustrating and that the opportunities are for those with vision and creativity. Each segment is aimed to inspire the viewers as they witness one determined individual after another defying the odds. The programme, which hit the airwaves last November has featured entrepreneurs such as Fomba Trawally, a Liberian businessman who started his career as a street vendor and just recently opened Liberia’s first paper and toiletry product manufacturing company; Isaac Oboh, who started Media 256, a film and production company in Kampala, Uganda; as well as Tola Ogunsola, Damola Taiwo and Dolapo Taiwo, who pioneered the establishment of a new digital store where Nigerians can access local music.

    According to Celine DeCarlo, Account Director at CNN International, “We’re delighted that FirstBank has chosen to connect with CNN’s global audience of key business decision-makers and opinion leaders around the world via ‘African Start-Up’. This is the first time CNN has created dedicated programming looking at African SMEs. First Bank’s exclusive sponsorship provides a unique opportunity to support a series that will shed light on efforts of successful entrepreneurs contributing to the growth and development of Africa’s economy

    According to FirstBank’s spokesperson and head, Marketing & Corporate Communications, Folake Ani-Mumuney, the bank’s sponsorship of CNN’s “African Start-Up” is a firm commitment of our drive to sustain the development of SME’s in Nigeria and Africa as a whole. “We are proud to sponsor ‘African Start-Up’ on CNN International. SMEs play a critical role as the engine of growth in the economy, providing employment to thousands of people and contributing significantly to GDP. This segment is a critical platform for repositioning the national economy for sustained growth, and one which aligns with FirstBank’s position as the number one SME bank in Nigeria.”

    “FirstBank is pleased that CNN has created this dedicated programme, which in itself is a first that takes a critical look at the lives of these entrepreneurs and the ways they have contributed to their societies in their countries. Having supported SME’s in Nigeria for over a century with first class products and services, CNN’s African Start-Up aligns with our commitment to drive and sustain the growth of SME’s in Nigeria,” she said

    The “SMEConnect” is one of the bank’s SME’s value propositions to focus on empowering small and medium enterprises in the country. The programme is geared towards building the capacity of SMEs to deliver and contribute even more significantly to national development. FirstBank’s value proposition goes beyond an SME product or suite of products to a robust engagement programme designed in every way to help SMEs succeed.

     

    Relationship

    management

     

    As part of the engagement programme, SMEs are given access to dedicated Relationship Managers (RMs) with deep industry knowledge of the customer’s business and challenges. They can offer basic advisory services to the customer.

    The subsector are also provided with opportunities for capacity-building and business networking through National Conferences, Open Seminars, Industry-specific Forums as well as Town Hall Meetings. SMEs are also offered a free payments-and-collections platform to drive the payment and receipt aspects of their businesses and deepen their transaction capabilities and speed, with a free web presence on a social cum business online portal to enable them trade as well as network.

    Start Up Africa follows several entrepreneurs in various African countries to see how they’re working to make their dreams become reality. It explores how they generate their ideas, formulate their business plans, raise capital and distribute their products. The entrepreneurs take viewers through their daily challenges. The series’ online component encourages user participation, and serves as a forum for ideas.

     

    Branch expansion

     

    Shobo said the bank’s branch network has increased tremendously in the last two years. “This is just to make sure that we bank the mass population more comfortable, without queues and things like that. Why do we have queues? It’s because we have more customers than the number of branches that can handle them. We have expanded the number of branches; our ATM network is by far the most in the whole industry. Of course, if you treat your customers better, the more funds they give you. So we are really concentrating on servicing our customers in all segments much better,” he said.

    He also said that the bank found out that it needed to have different ways of approaching different segments within the youths. “What we are also doing on the youth side is that we realised that times are changing. The way the youths see things is different from the way older people see things. The youths do not prefer going to the branches, they like online banking. You find out that a lot of the hits on the website are from the youths,” he said.

     

    SMEs in Nigeria

     

    Shobo said SMEs in Nigeria have to grow; because that is the only way the economy. “So it must grow and that is why we are doing the national conference and after that, we are going to have regional conferences. After that, we are going to have industry specific conferences to make sure that we take the SMEs to another level,” he said.

    The bank’s experience in SMEs financing, he added, is what separates it from other lenders. “We have the most SMEs; we have had them for a long time, we understand their needs better than anybody else and clearly that informed the way we approach them. Most other banks don’t even focus on SMEs. We have relationship managers focused on them. We have products that support SME operators that do not have collateral, which a lot of other banks don’t have. I think what we haven’t done well in the past is the capacity building and that is where we want to focus on now. Like I said earlier, we like double the other banks in terms of support to SMEs,” he said.

    He said the bank listens to SMEs to know their problems and address them. “We currently are the number one SMEs’ bank in Nigeria, but we do not want to stop there. We want to be able to create value for our SMEs. In listening to them, survey and focus discussions and all that, we found out that capacity is a big problem. When I say capacity, I mean being able to develop proposals which banks can finance or indeed which anybody can put money to finance for them. A lot of people have dreams on what they like to do, but how do I actualise those dreams? You find out that a lot of SMEs cannot do that successfully. That is one,” he said.

    Shobo said several SMEs go into businesses and they run into trouble because they just can’t do the business properly. It is capacity that is still the problem because if you had capacity and you understand them, you wouldn’t do a business that will fail.

  • VConnect eyes Ghanaian market

    VConnect eyes Ghanaian market

    Online business directory search engine, VConnect.com said it is set to extend its tentacles to Ghana.

    This is part of its pan-African drive to transform businesses with its new digital marketing tools which have grown small and medium enterprises (SMEs).

    Its General Manager, Mr. Deepanker Rustagi said having done well in the country with SMEs, it was time to expand its reach to other parts of sub-Saharan Africa to replicate the feat.

    According to him, the website is the seventh most visited in the country with 950, 000 business listings after three years of operations.

    “Africa is set to witness a new media powerhouse in a few years’ time. VConnect will not only attend to all business information needs in Nigeria, but will become a pan African solution provider,” said Deepanker in a statement.

    He disclosed that VConnect developed a user-friendly mobile site because statistics have shown that a huge percentage of website visits are done via the mobile phone. The company also recently launched her Android and Blackberry apps.

    “Due to the galloping development in the ICT space worldwide, SMEs in West Africa face the formidable task of surviving and competing in a global market. The presence of a local search engine like VConnect.com which has a wider reach, would help deliver unprecedented opportunities to the businesses,” he said.

    “VConnect takes pride in being ranked 28th on the Alexa list. It is also worthy of mention that we are among the top 10 most visited Nigerian Sites, sitting at number one in our sector. Our ultimate ambition is to index businesses in every city in West Africa,” he said. adding that its entry into the market has left positive footprints, following its acceptance that has seen it surpass its target by 160 per cent growth.

    According to Deepanker, the lack of a formal system of street numbering and unavailability of a functional postal system are some of the challenges facing the firms, adding that it will not rest on its oars until all SMEs are empowered.

     

  • ‘How global partnership has expanded SMEs’

    ‘How global partnership has expanded SMEs’

    Mr. Elo Umeh is Chief Executive Officer, Terragon Group Limited, one of the start-ups involved in the Federal Government’s YOUWIN project. Adetutu Audu met him in Lagos and he spoke about his life and passion for digital advertising.

    What was the driving force that prompted the establishment of Terragon Group Limited?

    Terragon Group is basically one of the products of necessity borne out of the strategic vision of a group of individuals who are my co-founders. What we saw was that the world was moving into the digital world. We observed that there was a sharp shift from television, radio and other traditional means to the internet. We also saw that there was an increasing traffic build up on the internet, which needed to be explored. Again, we looked at the ecosystem and we realised that there was a need to give birth to a business that would focus on the new media system, which of course will be driven by mobile and internet. It was this background that led to the emergence of Terragon Group. We started with mobile content aggregation, giving support to the talented people who are creating quality content and helping them monetise it. Through this, we were able to give necessary support to musicians, news reporters and creative minds in general. Through our intervention, we were able to help this set of people put their works on the mobile channel, from where it is monetised.

    Can you take us through a few solutions Terragon normally deploys to grow brand equity?

    I think the first approach has always been to identify our target audience and the mode of interacting with them. For instance, if we are targeting the youths, we will ensure that brands engage with them via the digital channel, letting them know the value of the brand, as well as how, where, and when to get the products or services being offered by the brand. We aim to influence their decisions and make them buy. Like I said earlier, the youth population drives consumption, and we know that in Nigeria and the sub-Sahara market, digital communication is limited, so what we have been doing over the last four years is educating brand owners on the value of digital advertising. Of course, such education will involve budgets and other resources which, if put together, will help us reach out to the target audience more effectively.

    Meanwhile, our strategy revolves round our three respective touch points and execution channels. As a group, we deploy our strategies through: Terragon Limited, Terrragon Media Services and Twinpine. Terragon Limited is the mobile content aggregation platform while Terragon Media Services handles digital marketing in the area of brand equity and engagement, data analysis, business intelligence and brand content strategy. The third is Twinpine, which is an Africa-focused premium mobile advertising network that helps brands and advertisers to reach consumers via locally targeted mobile platforms. To sum it up, Terragon is an enabler with a variety of solutions to help brands, agencies and organisations.

    What platforms do you have to show your work globally?

    Expectedly, we have been interacting with a lot of individuals and organisations online and we exchange with partners globally. But beyond this, in February next year we will be exhibiting at the annual Mobile World Congress in Barcelona (Spain). Without a doubt, the exhibition will be used as an avenue to showcase the works of Terragon Group to the global community. We also have offices in Accra, Nairobi, London, Cape Town, Bangalore and Port Louis and these locations also help us reach out effectively to our customers and partners.

    Do you have any support or affiliations?

    Yes, for example we were involved in FG/YOUWIN project and it was indeed a good experience. And we want to use this medium to sincerely thank the Federal Government for conceiving, and executing that project, especially to the young minds like us. The results of the initiative have been very positive and we hope to see a new generation of successful entrepreneurs emerge as a direct consequence of this project.

    What strategies are being implemented by Terragon to move more prospects through the digital funnel in Nigeria?

    What we do is to engage the services of experts and to invest in Technology. We ensure that we hire the best hands for the job. Often, instead of employing someone who is not qualified for a vacant position, we would rather let the position lie fallow.

    Is the infrastructural deficit in Nigeria in any way a setback for you?

    We have adjusted to the style of the deficit, and when you talk of power for instance, it is not our primary challenge in Terragon. Our challenge and concern is to develop the mobile channel hub of the Nigeria economy. After this, we can talk about power.

    What exactly are you doing to address this?

    It’s simple, having known that the PHCN is unable to meet the power needs of Nigerians successfully, what we are doing is to ensure that people are reached through their mobile devices. In days past, we depended heavily on traditional methods of advertising, where reaching out to people is subject to time. But the case is not like that with digital communication where you can speak to your audience even in their closet, and that is what we are doing. So the mobile phone is a strong link between the government and the people.

    Since the digital landscape is vast, success lies in having a consumer focus strategy and clear business goals.

    What distinguishing strategy has the Terragon group adopted over the years?

    It is simple! We have gone viral, with offices in London, Kenya, Uganda, and over half the continents of the world. It’s part of our strategy to capture the African continent through excellent execution and relationship management.

    Your area of specialisation is unique, is there any relationship between what you do now and your background?

    If we look at it from the generation I belong to, there could be some influences because of the current trend of things globally. The world has become a global village, where digital media is the in-thing. Narrow it down to my family background, there is no correlation. I came from an average home, born in Jos, Plateau State. The family came to Lagos when I was Four, settled in Anthony Village then we moved to Ajao Estate, Isolo Lagos state. My parents are not the moneybag but they value education and good upbringing.

    What exactly inspires you?

    Making good of the talent God has given me inspires me. I read business administration in school; I majored in business. In our family, we never got anything on a platter of gold; rather we work for anything we have gotten. To some extent, my mum is business inclined, but I don’t think that is where the inspiration came from. But I think the training ethics of my mum plays a factor.

    It is believed in some quarters that the youth segment is more accessible via digital platform than other segments of the market. Do you share this belief?

    I agree with that assumption to a large extent but let me quickly add that the entire market is today crucial to the digital revolution. Yes, the youth segment is easier to reach because they spend more time on the internet but the truth is that the older members of this generation and even the children are not lagging behind in the process. Having said this, I think the youth market is, in the actual sense, important in driving consumption because if you can hit them, you can link other segments of the market. At that point, you can relax and say your campaign is successful. These days, the older folks rely on the youths to make their decisions.

    In recent debates, some analysts are of the opinion that the digital media will soon edge out the traditional platforms, what is your take?

    Much as I agree that the digital media have some advantages over traditional media, I don’t subscribe to the thought that the traditional will die completely. I also want to emphasise the fact that we are not competing with the traditional folks. Traditional advertising will remain but the truth is that there is the need for people to interact via the digital sector in our economy. That is the gap we are trying to bridge. We are trying to ensure that consumers and brands are able to come up with a personalised engagement across digital channels, using the best and appropriate technology. Another important point to note is that the players in the digital media space will be taking a chunk of the budget meant solely for the traditional media because business owners will always look beyond the traditional to be able to be on the same page with the global trends.

     

  • ‘Why SMEs are shunning bank loans’

    High lending rates are frustrating the growth of small and medium scale enterprises (SMEs) as entrepreneurs shun bank loans.

    Interest rates hover around 22 and 28 per cent.

    Speaking at their monthly meeting in Lagos, the President, Association of Micro Entrepreneurs of Nigeria(AMEN), Prince Saviour Iche, said access to finance is a barrier to the growth of SMEs.

    He said the private sector relies on banks and financial institutions hence the need for banks to engage these firms.

    He claimed that banks do not care about small businesses.

    Iche said small firms’ owners’ confidence have waned, as their investment intentions have fallen due to the state of economy and lack of access to finance.

    As a result, small businesses don’t expect to increase their staff soon.

    He advocated a plan to increase access to finance and boost competition in the sector.

    He called on the government to support and promote small businesses through regulation and funding through banks or by looking at the tax system.

    Small business owners, he maintained, were yet to show the same signs of confidence on business prospects.

    Rather, he said, they are taking longer time to find their feet again. As a result, he said industrial production has shrunk, hit by a reduction in manufacturing.

    igh lending rates are frustrating the growth of small and medium scale enterprises (SMEs) as entrepreneurs shun bank loans.

    Interest rates hover around 22 and 28 per cent.

    Speaking at their monthly meeting in Lagos, the President, Association of Micro Entrepreneurs of Nigeria(AMEN), Prince Saviour Iche, said access to finance is a barrier to the growth of SMEs.

    He said the private sector relies on banks and financial institutions hence the need for banks to engage these firms.

    He claimed that banks do not care about small businesses.

    Iche said small firms’ owners’ confidence have waned, as their investment intentions have fallen due to the state of economy and lack of access to finance.

    As a result, small businesses don’t expect to increase their staff soon.

    He advocated a plan to increase access to finance and boost competition in the sector.

    He called on the government to support and promote small businesses through regulation and funding through banks or by looking at the tax system.

    Small business owners, he maintained, were yet to show the same signs of confidence on business prospects.

    Rather, he said, they are taking longer time to find their feet again. As a result, he said industrial production has shrunk, hit by a reduction in manufacturing.

     

  • ‘Wrong business plan, bane of SMEs’

    ‘Wrong business plan, bane of SMEs’

    Mrs. Fayo Williams, a pharmacist by vocation, is Executive Director, Rely Supply Limited, which interest cuts across production of first aid boxes, medical equipments and consumables. Established 23 years ago, the company has gone through one transformation or the other. Mrs. Williams who also doubles as the Chief Executive Officer shared her experience managing the start-up in this interview with Bukola Afolabi

    How did you start?

    I wrote up a business plan in a very simple way that I could muster about the location, number of patients/customers I may be getting every day, up to what kind of income will be coming on a monthly basis. This made my spouse who is a co-founder of the business decide that for the first three months we have to set aside enough funds to pay the salaries since the business would not likely break even until further down the line. I also administered a questionnaire to ask whether people will need first aid boxes.

    I found out that if I should just set up a pharmacy like every other person, there will truly be nothing special about it. So, I decided to embrace this aspect of emergency care. The awareness was very low in the populace and I said that was an area we could play in. I have some experience in that and it helped me to jumpstart the business.

    Our first aid kits have found their way into virtually every sector of the economy; from education to the airline industry, to manufacturing, to tourism and even entertainment. I am proud to have the likes of Femi Kuti shrine as one of our customers. We have major air lines like the Aerocontractors, Arik and Mediview airlines as our customers. We also have some of the banks as our customers, and this has been very encouraging to have well-established companies patronising our medium-scale organisation so that the economy can grow.

    How much capital are we talking about?

    It may be difficult to place my finger on that, that’s about twenty- two years ago but I know that we had some savings and we got money from family members, particularly from my in-laws and also my family, my mother, at least, had to pledge some shares and it was totally an interesting situation because I had to bring her from Ogun State to show her physically to the Registrars and to show her physically at the bank and I hope that all systems now have moved away from having to show physical presence of people to tender collateral.

    Where did you start from?

    We actually started from Orimolade Crescent, off Adeniyi Jones Avenue. It was like a small lock up shop. It barely met the requirements; because pharmacy stores have a lot of requirements. You must have a minimum of twenty square metres at that time to setting up a pharmacy shop. So, we barely just met that requirements and we had a store, a show room and a little office. I have always believed in using professionals. So, for every aspect I got a friend who was a chartered accountant to set up a primary and secondary books account and I got an architect who was also an old school mate to give us the drawing and get the tilling and others done in the shop. What we did was that along the years we did try to build up a kind of reputation and we repaid our loans and once the money was returned they were able to give us again when we asked – we made sure we returned every penny.

    How will you describe your relationship with the banks?

    It was not easy but getting support was based on fulfilling certain requirements. For instance, the banks wanted the certificate of incorporation, registration documents of the company and at times they will ask for cash flow statements which we had a consultant coming in from time to time before we had our own in-house officer. He assisted until I learnt how to prepare a cash book myself and I was able to buttress our request for finance with the appropriate documentation. We’ve been able to get non-collateralised loan and we’ve also been able to get some other instruments. Actually, there should be a national policy to strengthen and encourage access to finance by SMEs.

    For instance, it took a while for the government to look into fruit juice industry to say we have enough fruit, we have companies manufacturing good juice locally and they should be patronised. By the same token, we are happy to have the local content act now whereby certain kind of businesses related to the oil and gas industry are being reserved for Nigerians.

    So, we need this to be in virtually all industries, in health care, particularly pharmaceutical sector. The production capacity for anti-malaria, analgesics, etc, are known – all figures are available from the pharmaceutical manufacturers group of the Manufacturers Association of Nigeria and it will be very good if we can have some items reserved for these industries. For instance, the item we are producing, the first aid kit, there is really no enabling policy that says look you need to look inward and such would really help us a lot.

    So, we need to keep on it, continually updating our knowledge and know what our opponents are producing. When these things are published, even when handed over to the Bureau of Public Procurement, they can scout for vendors within the data base to encourage indigenous companies to bid for them so that we can keep our people in good health and give them jobs here in Nigeria.

    If you are to advice somebody who wants to start a business, what are the three most important things?

    Number one; there must be a viable business idea. It is not enough to wake up on one side of the bed and say, ‘wow, I’ve found it; this is what I’m going to do.’ You must subject it to scrutiny; you must prepare your business plan early and show on paper your business idea. You are actually the one who can find customers who will patronise you, who are ready to pay for that product or services and whether the idea is going to be a viable and sustainable one.

    Number two, as an entrepreneur who has the passion, you must have the training, so to stay, in the line of business you want to go in. If you don’t have it immediately, you may have to acquire that training. So, you need to get all the knowledge you can to run that particular business. A lot of businesses have aspects of it which you must be vast in so that you don’t go wrong.

    The third thing I will say is you must assemble a powerful team, a good team. You must recruit human resources carefully. Make sure they are those that can contribute positively, share your vision with them and make sure they can run with it. Having a business idea and a good business plan, the entrepreneur must not only be passionate but properly grounded in that line of business.

    What are things you must avoid as an entrepreneur?

    Number one; lack of documentation, you must avoid that at all costs, right from when you start, you must do that and you need professional advice. So, probably the mistake is not getting professional advice where needed. There is professional advice at a price you can afford if you can look for it. Within your network, within your family, you need to locate a professional in the field that is under consideration whether it’s legal, for you to get any business service which enables you to do the business you want to do. Your day-to-day activities need to be documented and at the end of the month, you need to be able to review, for instance, your profit and loss account. The figures, they tell a lot of stories and you must be able to see whether the business is making money. So, just starting your business with members of your family, people who are there for sentimental reasons, is not enough. Family members can be in your business provided they are adding a lot of value. For instance, we have men setting up businesses with their wives. So, you have a team and the roles and responsibilities that are well outlined and the understanding is there. It has worked for some people. You cannot just start your business for the fun of keeping people on the payroll because it is a sure way of ruining the business. You must identify the task you need people to run with and see who needs to do that task in the organisation.

  • NSIA lifts agric fund with $10m

    NSIA lifts agric fund with $10m

    Nigeria Sovereign Investment Authority (NSIA), through its Nigeria Infrastructure Fund, is commiting $10 million to the Fund for Agricultural Financing in Nigeria (FAFIN).

    The deal is being done alongside the Federal Ministry of Agriculture and Rural Development (FMARD) and KfW, the German government-owned development bank, its Chief Executive Officer Uche Orji has said.

    According to a statement, the Fund is an innovative initiative, designed to transform the agriculture finance landscape in the country. With a $100 million target, FAFIN will provide tailored equity and debt capital and technical support solutions to commercially-viable small and medium-sized enterprises (SMEs) and intermediaries across the country’s agricultural value chain.

    The Fund will be dedicated to catalysing an agriculture-led inclusive economic growth in through enhanced agricultural productivity, value-added processing and market linkages. The $100 million target will be reached through further contributions from private sector investors.

    According to NSIA, its participation in this initiative is a firm demonstration of its agriculture strategy as one core area of focus alongside power, housing, healthcare and motorways, among others. Through this strategic decision, the NSIA hopes to support the realisation of government’s Agriculture Transformation Agenda and facilitate national food security.

    Orji said: ”Agriculture is a sector of strategic  importance to the NSIA and an area we see opportunities for significant growth and profit through the facilitation of the enhancement of Nigeria’s  critical agriculture infrastructure.”

  • Sterling Bank unveils business initiatives

    Sterling Bank unveils business initiatives

    Sterling Bank Plc has resolved to invest in new business initiatives and nurture them to become viable Small and Medium Enterprises (SMEs).

    In a statement, the bank’s Group Head, Strategy & Communications, Mr. Shina Atilola said the exercise is part of efforts to facilitate real growth in the economy. The bank said small businesses remain the catalyst for real economic development anywhere in the world.

    He explained that national economic development prospects in any country was hinged on the entrepreneurial energy of vibrant SMEs as most big business concerns grew from small scale to become big icons.

    Atilola declared: “Many economies, developed and developing, have come to realize the value of small businesses. They are seen to be characterised by dynamism, witty innovations and efficiency as their small size allows for faster decision making process. Small businesses are believed to be the engine room for the development of any economy because they form the bulk of business activities in a growing economy like that of Nigeria.”

    He noted that a team of seasoned consultants were engaged by the bank to carefully scrutinise proposals received from members of the public.

    He said the bank decided to launch the project in order to support those who have come up with business plans as part of their New Year engagement’. He said that already, 50 contestants have qualified for the second round of the on-going “Meet the Executive” Project sponsored by Sterling Bank Plc.

    Atilola noted that over 1,000 business plans were received from Small Business Owners (SBO) aspiring to become big entrepreneurs. He said: “The “Meet the Executive” project is designed to support new and aspiring entrepreneurs.

     

  • GTBank promotes SMEs’ growth

    GTBank promotes SMEs’ growth

    Guaranty Trust Bank (GTB) has said it will pay more attention this year to facilitating the growth and development of the small and medium enterprises (SMEs) sector which is the engine of growth for developing economies.

    Its General Manager, Communication and External Relation, Mrs. Lola Adedina disclosed this when she led a delegation of the bank to pay a working visit to the Lagos head office of Vintage Press Limited, publishers of The Nation.

    According to her, GTBank has set up a website that will help SMEs sell their goods all over the country and abroad.

    She explained that one of the bank’s priorities this year is on SMEs because its management has realised that despite government’s effort and various loans, most of the SMEs are not successful.

    She said: “Past and present governments have channeled a lot of efforts towards SMEs but nothing has really happened, adding that majority of the SMEs that have benefitted from government loans still come back to bank to ask them for loans.

    “GTB decided to explore the areas in which it can add value to SMEs and we realised that e-commerce is a missing aspect. We have 160 million Nigerians out of which over 50 million are using the internet today and so GTB created a platform that enables our customers who have businesses to open their shop on our platform so that they can trade with anybody anywhere in the world.

    “We give them a payment engine which is called the GT bank web pay so that the customer is sure that it is secure and backed by GT might. We also offer the customer about five different types of logistic partners like DHL, FEDEX, Redstar and others who are well known in Nigeria so that they can manage your shipment and fulfillment for the customer.

    “So the woman who makes hand chain and does not know how she will sell her goods can come online and people in Abuja, Lagos, London, can buy her goods. This means that we are giving them a platform to trade their goods and a platform for e-commerce. Accountants, real estate agents can all come on the platform”.

     

  • How foreign institutions support SMEs in Nigeria

    How foreign institutions support SMEs in Nigeria

    Apparently miffed by the poor performance of small and medium scale enterprises (SMEs) in the country, the World Bank, African Development Bank (AFDB), International Finance Corporation (IFC) have restated their commitment toward the growth of the sector. They spoke during a general meeting organised by the Nigerian Association of Small and Medium Scale Enterprises in Lagos recently.

    Also at the meeting include the Nigerian Stock Exchange, First Bank Nigeria Plc, Heritage Bank, Bank of Agriculture, and other stakeholders in the financial sector.

    The financial institutions in different presentations identified inadequate access to finance as the major challenge facing SMEs in the country.

    Representative of the World Bank, Mr. Michael Wong, explained that the government should provide a platform that would aid easy access to funds for the growth of SMEs in the country.

    He said, “Enterprise survey shows that labour is cheap but value added is low due to lots of constraints. Nigeria SMEs, access to finance is low compared to other African countries like Kenya. Most working capital is financed through internal funds.”

    He noted that the World Bank had concluded plans to launch another scheme to support SMEs in Nigeria.

    CBN representative, Jeremiah Abah, said SMEs contributed largely to the development of an economy.

    The African Development Bank (AfDB) signed an agreement to provide two sovereign-guaranteed multi-tranche lines of credit (LoCs) of respectively US $500 million to Bank of Industry (BOI) and of US $200 million to Nigerian Export-Import Bank (NEXIM) in order to support the modernization and expansion of export-oriented small and medium enterprises (SMEs).

    The LoCs will allow local SMEs to be more competitive, scale up their operations and ultimately create more jobs in Nigeria. The LoCs will include a technical assistance package to strengthen institutional capacity of BOI and NEXIM as well as their SME clients.

    Through this integrated financing package, the AfDB is supporting Nigeria’s efforts towards a more diversified economy away from oil and gas. The LoCs will supply multi-sector financing to address the challenge that SMEs face in accessing finance in the country. Therefore, export-oriented SMEs will be able to become more competitive, ensure sustainable growth of their operations and generate employment in the Nigerian productive sectors.

    Ousmane Dore, AfDB’s Resident Representative in Nigeria, said: “This AfDB combined programme will contribute to mobilize significant financial resources for Nigerian export-oriented SMEs, ultimately contributing to economic development, employment opportunities, foreign exchange and regional trade integration.”

    While lauding the contribution of the AfDB, Robert Orya, NEXIM Managing Director, said: “Thanks to AfDB’s support through this program, NEXIM seeks important economic development achievements, including approximately 55,000 new jobs for its SME clients, US $1.6 billion in foreign exchange and an overall contribution of almost seven per cent to non-oil exports, including a 10 per cent share in Economic Community Of West African States (ECOWAS) exports. This facility will provide a great opportunity for NEXIM to make available concessional long-term funding in pursuance of its strategic objectives of enhancing value-added exports and bolstering the capacity of SMEs for job creation and foreign exchange earnings.”

    On her part, Ms. Evelyn Oputu, BOI Managing Director, noted that: “The AfDB’s operation, contributing to capital market development and government revenue, is likely to generate significant additional lending to our export-oriented SMEs client at a time when it is sometimes difficult for commercial banks to finance this important sector of according to (IFC).”

    According to reports, recent data provided by the National MSMEs collaborative survey 2010, put the number of MSMEs in Nigeria at 17,284,671 with total employment of 32,414,884.

    Mr. Reginald Nworka, an SME Development Specialist with IFC, in an interview said the partnership is a great opportunity for people to improve their lives and escape poverty.

    He noted that what the initiative intends to achieve was to extract people from poverty circle and launch them to a realm of prosperity through empowerment.