Three Illusions Of Being An Entrepreneur

The growing unemployment, resulting from a receding economy, is breeding a rising rank of individuals who opt to be entrepreneurs as an escape route from the pangs of poverty. Sadly, more than a few aspiring entrepreneurs have little or no knowledge of what it takes to be an entrepreneur.

Entrepreneurship is the art of designing and creating new business enterprises. The prime mover bears the associated risks, in the hope of making profits in case of success. While a budding entrepreneur must know the ins and outs of starting and growing a business, many aspiring entrepreneurs hold false ideas about their proposed line of work. Here are three illusions about entrepreneurship:

1. The Entrepreneur As Boss: There is the widespread impression that entrepreneurs are the bosses because they are the creators, founders or chief executives of their businesses. This notion is reinforced by the fact that they have a strong voice in making the decisions that determine the amount of money or income the business makes, and the products and services it creates. That thinking has some truth in it, especially within the corporate environment where the entrepreneur apparently has the last word.

The complete truth, however, is that the entrepreneur has a real boss, the customer. The key decisions made by the boss are influenced by, and tailored to satisfy the customers of the business, the people who pay the entrepreneur by buying the products and services offered by the business. Yes. The consumer, the customer is the boss. They are the sources of the sales and income for the business. Without them, the business fails.

2. Entrepreneurs Get-Rich-Quick: Many people itch to start their businesses in the hope of getting rich overnight. People with this mindset are often disappointed because that rarely happens in the real world. Start-ups usually face the proverbial teething problems, and may face various challenges like slow sales, low profit and weak cash flow. When businesses encounter these difficult times, as they always do, the faint-hearted entrepreneurs may give up.

Experience shows that overnight success is the stuff of fiction. Business is not a 100-metre dash. It’s almost always a marathon race. It takes time for a new product or service to gain traction in the marketplace. It takes time before a new business to start making money. It is a gradual process, with ups and downs, for a new business to start making profits. These require hard work and perseverance. Every successful entrepreneur knows this.

3. The Entrepreneur Is Superhuman: Not really. The entrepreneur bears responsibilities as a leader. The entrepreneur is self-confident, knows what he or she wants and goes for it. The entrepreneur focuses on ways to improve himself or herself and the business. The entrepreneur thinks in ways that will enable him or her to overcome challenges. The entrepreneur makes difficult decisions with a view to helping the business to generate money.

Entrepreneurship requires a lot of skills for a person to start and grow a business. Entrepreneurs know their business inside out, which enables the smooth running of the business. But they don’t have to be superhuman. They don’t need to know it all. Or be jacks of all trades. What they need is the ability and willingness to learn within and outside their chosen spheres of business. Above all, entrepreneurs must understand that they cannot do it alone. They must work with teams of managers, particularly when their businesses begin to grow.

· Do you need help in developing your entrepreneurial skills? Explore new opportunities at https://smefinance.org/thesmelab.

· Would you like to chat with aspiring and practicing Small Business Owners about how to start or grow your business? Join THE SME GROUP, our official Facebook page, at https://www.facebook.com/groups/smefinance/

Covid-19, CBN And Loans To Small Businesses

The Central Bank of Nigeria (CBN), on March 16, 2020, in furtherance of its mandate to assist affected businesses and regulated financial institutions in cushioning the adverse economic impact of the Covid-19 pandemic, announced the following policy measures:

  • Extension of Moratorium: Effective March 1, 2020, CBN intervention facilities are granted a further moratorium of one year on all principal repayments. Consequently, intervention loans currently under moratorium are granted an additional year. Accordingly, participating financial institutions are to provide new amortisation schedules for loan beneficiaries.
  • Reduction of Interest Rate: Effective March 1, 2020, interest rates on applicable CBN intervention facilities are reduced from Nine to Five percent per annum for one year.
  • N50 Billion Targeted Credit Facility: The CBN has established a N50 billion facility through the NIRSAL Microfinance Bank for Small and Medium Enterprises (SME) that are hard hit by Covid-19. Possible beneficiaries include but are not limited to hoteliers, airline service providers, healthcare merchants, etc.
  • Credit Support For Healthcare Industry: In anticipation of an increase in demand for healthcare services and products, the CBN, has opened its intervention loans to pharmaceutical companies, and hospital and healthcare practitioners who intend to open or expand their drug manufacturing plants or upgrade their facilities to first class centres. These are additions to existing CBN interventions in the agriculture and manufacturing sectors.
  • Regulatory Forbearance: The CBN granted Deposit Money Banks leave to temporarily restructure the tenor and loan terms for businesses affected by the outbreak of Covid-19, particularly oil and gas, agriculture and manufacturing enterprises.

What do these measures mean for the Small Business Owner? A sampler:

  1. If your business has a loan under moratorium, it is now entitled to an extension of one year. And, if you are yet to do so, you should ask for, and receive, a new amortisation schedule for the loan from your bank.
  2. If you procured your loan through a CBN intervention facility at an interest rate of Nine percent per annum, the interest rate has been reduced by Four percent. You will now repay the loan at a new interest rate of Five percent per annum for one year.
  3. If you are a hotelier, airline service provider, healthcare merchant, etc. and your business is hard hit by Covid-19, you can now access the new N50 billion CBN facility for Small and Medium Enterprises (SMEs) through the NIRSAL Microfinance Bank.
  4. If you are in the pharmaceutical, hospital or healthcare business, and you intend to open or expand your drug manufacturing plant or upgrade your facility to a first class centre, the new N50 billion CBN facility is ready and available for you.
  5. Are you in oil and gas, agriculture, manufacturing, etc. and you are struggling with repayment of your loan to your bank? Now is the time to negotiate a temporary restructuring of the terms of your loan. The CBN has granted forbearance to Deposit Money Banks for this purpose.

Still On Covid-19: Dear Customers And Partners

The continually changing COVID-19 situation in Nigeria, Africa and the world presents an unprecedented challenge and a time of uncertainty to all of us. As we monitor, assess and respond to this pandemic, we wish to reassure our community of Small Business Owners and the ecosystem that supports them. We assure our valued customers and partners of our business continuity plan, as our primary focus is to continue our commitment to provide the products and services that we have all come to rely on.

In response to the pandemic, our staff who are able to work remotely now do so on Mondays, Wednesdays and Fridays, while we maintain skeletal presence at our office on Tuesdays and Thursdays. We are maintaining this routine up to and including April 13, 2020. Rest assured, our digital platforms, https://smefinance.org, https://smefinance.org/thesmelab/, https://smefinance.org/forum, are up 24/7. We can also be reached on +234 815 612 1212 during office hours.

We have taken these measures to help in managing the potential spread of Covid-19, protect the health and safety of our staff and maintain our capacity to continue working with our partners and serving our customers. While we monitor the situation, we urge everyone to stay tuned to updates on the pandemic as released by the World Health Organisation and our various national health authorities.

Our thoughts and our hearts go to everyone. Please, stay healthy and safe from Covid-19!

Contact Us Now if your business needs help with any of the above-listed CBN policy measures.

Access Bank’s N50k-N1m TraderLite Loans For Micro Businesses

Access Bank Plc, in its strive to grow its customer base and strengthen its position in the retail segment of the market, has launched its TraderLite Account for micro-businesses. TraderLite loans target micro-business owners whose businesses have turnover of N50,000 to N1 million and operate in their own name or registered business name.

TraderLite is a variant of the Diamond Business Advantage account within the Bank’s small business portfolio. It is specially designed to provide financial inclusion for micro businesses, and equip them with the skills to grow their businesses.

There are two types of TraderLite: DBA TraderLite Individual and DBA TraderLite Business. The former is for individuals with unregistered businesses while the latter is for registered businesses. The Diamond Business Advantage seeks to add value to Micro, Small and Medium Enterprises and empower Small Business Owners to leverage smart banking in growing their businesses. It offers market linkages, increased referral base and networks to enable them access new markets for their products and services.

The offer includes such networking opportunities as Business Clubs, Business Clinics and Business Seminars where Small Business Owners can expand their base through interacting with other Micro, Small and Medium Enterprises.

The monthly Business Clinic is the bank’s advisory service for small businesses. It aims to strengthen the managerial capacity of small businesses. Participating customers interface with subject experts or successful entrepreneurs on a one-on-one basis, and receive solutions that address challenges that are specific to their businesses. They are thereby assisted to become better managers of their businesses and better customers of the bank.

The Advisory Help Desk provides information to small businesses, including newsletters on industry trends; best marketing practices; industry-oriented guidance on how to structure better cash flows; counselling on business planning; marketing strategies; and other business-related issues. The Advisory Help Desk helps to resolve issues concerning how to register a business, common legal and tax matters facing small businesses and structural challenges of small businesses.

The Advisory Help Desk also addresses corporate governance issues in small businesses, which typically requires administrators to possess specialised skills, industry exposure and good knowledge of the marketplace. Micro and small business customers who need further support are referred to consultants who diagnose and proffer solutions to their problems.

Victor Etuokwu, Executive Director, Retail Banking, Access Bank Plc, on the debut of TraderLite, says: “The future of Nigeria’s economy is Small and Medium-Scale Enterprises because they can provide more than enough jobs to the unemployed if empowered. And that is why the bank’s passion is to offer more than financial services to its customers and also work with them in growing and expanding their businesses. Whichever category you fall into; we are here to work with you to take your business to a whole new level.”

Micro Business Owners interested in accessing TraderLite should contact any branch of Access Bank Plc. for terms and conditions.

Contact Us if you or your business need help in accessing the TraderLite Loan

TEF Disburses $2.5m AfDB Money, Extends Application Deadline To March 31

The Tony Elumelu Foundation (TEF), in furtherance of its commitment to African entrepreneurship, has disbursed $2.5 million seed capital to beneficiaries of the 2019 Entrepreneurship Programme under the African Development Bank (AfDB)-sponsored $5 million initiative.

The second half of $2.5 million is expected to be released to participating entrepreneurs in the first quarter of this year.

This commitment of the African Development Bank to the Tony Elumelu Foundation Entrepreneurship Programme follows the recent disbursement of $8.5 million from the United Nations Development Programme (UNDP) to 2,648 entrepreneurs in the Sahel region and Africa. It also accelerates the economic empowerment plan being generated by the Foundation. In collaboration with African and global partners, the Foundation significantly increased the scale and reach of its impact in 2019, with the number of TEF beneficiaries rising from its annual commitment of 1,000, to 5,150.

With its goal of strengthening small and medium-sized enterprises and developing young entrepreneurs, AfDB joined the growing list of global development institutions benefiting from the Tony Elumelu Foundation’s unique model of identifying, training, mentoring and funding entrepreneurs and start-ups across Africa. The partnership demonstrates the implementation of the 10-year AfDB “Jobs for Youth in Africa” strategy, launched in 2016 to support the creation of 25 million meaningful jobs across the continent.

The partnership demonstrates the willingness of the Foundation to share its infrastructure and know-how with others who share the TEF mission of empowering young African entrepreneurs and its goal of catalysing economic growth across the continent, by creating millions of jobs and generating billions in revenue.

Meanwhile, the Foundation, currently accepting applications to the 2020 cohort of its flagship Entrepreneurship Programme, has extended its deadline to March 31, 2020. The extension aims to give more aspiring or practising Small Business Owners the opportunity to undergo business training, the first and critical stage of the Programme.

The Tony Elumelu Foundation Entrepreneurship Programme accepts applications from African entrepreneurs with business ideas that can transform Africa. Successful applicants join the programme’s 10-year, $100 million commitment of training, mentoring and funding 10,000 African entrepreneurs in every African country by 2024. The Programme provides critical tools for entrepreneurial success, including:

  • Intensive 12-week training on starting and managing a business.
  • Mentoring in creating a fundable business plan.
  • Non-refundable start-up grant of $5,000 and access to a convertible loan of $5,000.

Click here to apply.

Do you need help in preparing for the TEF Programme? Contact Us Now or email me at ted.iwere@smefinance.org.

Why Accounting Should Be A Year-Round Work

One of the smartest investments you can make as a Small Business Owner is to engage an accountant to help you grow your business. This singular action will help you stay on top of your finances, and transform the numbers that run your business into insight you can use to improve it.

Where do you start when you consider setting up the accounting system of your business? What information should you give to the chief custodian of your accounting function? What value should this service provider add to your business, for the business to get the most from such expertise?

The answers to these questions depend on the type and nature of your business. Whatever they are, having year-round checklists is a good place to start. The checklists should cover the things you want to pass to the accountant, and what you want your accountant to put on the table in return. Whether you hire a full-time accountant or outsource the function, your main objective is to act and be guided by the need to make accounting a year-round work, not work that should wait until the last minute, to be done without plan or purpose.

While the end of the year is a good time to go through the books with your accountant, and get the inputs for planning the future of the business, it is even better for the Small Business Owner to maximise the value of the relationship by having a continuous dialogue with the provider of this service. The more time that the Small Business Owner spends on the finances of the business, the more successful the business will be.

Preparatory to creating the checklists for working with the accountant, the Small Business Owner must lay the foundation of this effort with two building blocks:

  • Creation of folders or files. This is a key step in organising the finances of your business, and ought to start even before calling in an accountant. It is an essential to staying organised, not something the business does because it is tax time. Organising files for items like income, expenses, payroll, vendors, etc. create order, and save time and money.
  • Investment in accounting software. This helps to make the accounting process easier, including recording transactions and creating invoices. This is an advance towards automating the accounting functions of the business.

With folders/files for the critical components of the accounting books, with an accounting software in place, it is time to make the following accounting checklists:

1. Daily Checklist. This makes time to tackle the daily bookkeeping items that give a snapshot of your accounts. It covers monitoring payments received, posting expenses, and placing receipts and sundry items in their respective folders or files. The accounting software can scan receipts, record transactions, produce invoices, and enable the accountant to access them. It should record transactions, and track what’s coming into the business, particularly payments received in cash, cheques, etc. and what’s going out, especially payments like marketing expenses, suppliers’ invoices, etc. These can be summarised on a weekly basis to show where the business stands.

2. Weekly Checklist. The weekly checklist helps the business to stay on top of what’s going out and what’s coming in, including routine chores like paying bills and credit collections. It includes review of cash flow, such as unpaid and upcoming payables to be aware of and un-settled and upcoming receivables to monitor.

3. Monthly Checklist.This involves balancing the cheque books, to be sure that the business’ balance agrees with the ending balance on your bank statement(s). It also involves reviewing invoices, to confirm if anyone is owing money for which the business should have received payment; review, for payment, of sales tax liability for the month; review of inventory, if applicable, to track best sellers and ensure adequate stock or plan markdown of high stock items; review profit and loss statements, and compare with existing budget; review the balance sheet; and back up the accounting software to safeguard the month’s work.

From the foregoing, the accountant should deliver the following results to the Small Business Owner on a monthly basis:

  • Copy of bank reconciliation.
  • Profit and Loss Statement.
  • Balance Sheet.
  • Cash Flow Reports.
  • Budget versus Actual report of income and expenses.
  • Review of tax payments for payroll, company income, and sales tax.

4. Quarterly Checklist. A list of deliverables from the accountant on a quarterly basis should include:

  • Estimated tax payments for the quarter.
  • Review and filing of payroll reports, including FIRS liabilities, for the quarter.
  • Estimate, for filing, of income tax payments for the quarter.
  • Computation, for payment, of sales tax liabilities for the quarter.
  • Profit and Loss Statement for the quarter.

5. End of Year Checklist. This includes taking physical inventory of raw materials, finished goods or merchandise on hand, comparing and/or adjusting recordings in accounting system, and reports of earnings of employees and suppliers during the year. At year-end, the accountant should deliver the following to the Small Business Owner:

  • Financial reports for the year.
  • Listing of major purchases of fixed assets for calculation of depreciation.
  • Review, for submission, of tax returns for the year.
  • Listing of adjusting journal entries recorded or proposed for the accounting system.

The above-listed checklists outline what a small business needs to work with a professional to assure the accuracy of its books, the timeliness of its statutory returns, and access to an invaluable measure of its growth and health. The checklists provide a roadmap for working with an accountant to make accounting a year-round work. By so doing, the Small Business Owner is empowered with the financial information to guide important decisions about the business, and guard the business against avoidable risks and unpleasant surprises.

Do you need help in setting up and managing the accounting system of your business? Contact Us Now or email ted.iwere@smefinance.org.

Naira Rain At Zenith Bank: Techies, Advance!

‘‘People talk about the fact that we are in the fourth industrial revolution. If you reflect on each of the revolutions from Number 1 to Number 4, you will realise that at every point in time, when a revolution comes up, it disrupts the convention with which things have been done. But there is still one aspect of the convention that none of these revolutions has been able to disrupt. That is financing. The first industrial revolution needed finance to succeed. The second needed finance to succeed. The third also required finance to succeed. The fourth will also need finance. We are here to assure the digital community that we are all out to support the funding initiatives of their agenda.’’

These are the words of Ebenezer Onyeagwu, Group Managing Director of Zenith Bank, in his closing remarks at the first Zenith Bank Tech Fair at Landmark Event Centre, Victoria Island, Lagos, on Wednesday, November 27, 2019.

Given the references to the four industrial revolutions by Mr. Onyeagwu, fondly called the Global CEO by his colleagues, it is helpful to understand the possibilities he is talking about.

Let’s begin with the term industrial revolution, before exploring the four industrial revolutions under reference. An industrial revolution is the emergence of new technologies and new realities, which fundamentally transform the world’s existing economic and social structures. The world has, through history, witnessed four distinct industrial revolutions, including the on-going fourth industrial revolution.

The first industrial revolution, the age of mechanisation, used water and steam power to mechanise production. Beginning around 1760, through invention of the steam engine, steam powered everything from agriculture to textile manufacturing. Steamships, railroads, machine tools and factories transformed agrarian existence to urbanisation, and revolutionised the movement of men and materials. Cities, industries grew and economies started growing.

The second industrial revolution, the age of science, used electric power to create mass production. Science brought key inventions like gasoline engines, airplanes, chemical fertilisers, etc. Most notably, it brought the assembly line, which effectively powered mass production in factories. As people followed jobs, the early 1900s accelerated movement of people from rural to urban areas, and ushered in the modern world with such life-transforming conveniences as electric lighting, radio and telephones.

The third industrial revolution, the digital revolution, used electronics and information technology to automate production. Starting from the 1950s, the third industrial revolution introduced semiconductors, mainframe computing, personal computing and the Internet. This shift from analog electronic and mechanical devices to digital technology dramatically disrupted the global communications and energy industries. It continues to change how the world lives, works and communicates.

Where are we now? No prizes for guessing right. The fourth industrial revolution is well underway, and technologies that were science fiction in the 1950s and 1960s are now realities. The fourth industrial revolution, building on the third (the digital revolution), merges technologies that now blur the lines between physical, digital and biological spheres. It is extending the third industrial revolution and transforming entire systems of production, management and governance. It is connecting billions of people via mobile devices, with hitherto unknown processing power and access to knowledge, and breeding breakthroughs in such fields as robotics, artificial intelligence, autonomous vehicles, the internet of things, 3-D printing, biotechnology, nanotechnology, energy storage, materials science and quantum computing.

In helping us make sense of where we have been, where we are heading, and what it could mean for business and finance, Mr. Onyeagwu notes the objectives of the Tech Fair as follows:

  1. To refresh the passion of Zenith Bank for Information and Communications Technology (ICT).
  2. To promote awareness about digital literacy, and pass the message that digital literacy is for the young and the not so young, because they all have to learn and adapt so that they do not miss the ICT train.
  3. To make the Zenith Tech Fair all-inclusive by bringing together the stakeholders in the ICT ecosystem.

Zenith Tech Fair, christened ‘‘Future Forward’’, a ‘‘showcase of leading technology innovations across all aspects of life’’, is a pet project of the bank’s Founder and Chairman, Mr. Jim Ovia, who Zenith bankers reverentially call ‘‘the Visioner’’ and ‘‘Nostradamus of our time.’’

Presenting Zenith Bank’s value proposition to the technology industry, Mr. Onyeagwu says: ‘‘The bankers committee has set aside N23 billion to finance SMEs at single digit, with 80 percent of this amount set aside for ICT and related businesses. These funds are available, and you can access them through Zenith Bank. Interest rate is single digit, with tenor of one year to 10 years. If it is taking a long time for CBN to make the funds available, Zenith Bank will bridge it for you at the same single digit. Therefore, don’t waste time. The time for action is now. We are ready. We want to assure you that you have our full support. We will work with you and enable your audacity to move forward. Today, Zenith Bank is telling you to have the courage to be audacious. Get up, and take action. We will back you up.’’

After handing out cheques of N10 million, N6 million and N5 million to the first, second and third place winners, respectively, during the bank’s first hackathon (Zenathon 2019), after giving N1 million to each of the remaining seven start-ups that reached the final stage, Mr. Onyeagwu virtually loosened the purse strings of Zenith Bank, saying: ‘‘Let me begin by announcing that for the 10 of them who made the presentations, your funding is ready with Zenith Bank at single digit. For all those who registered, we have set aside the sum of half a billion Naira to promote the funding of the digital initiatives that we are talking about.’’

You have heard it. More than ever before, from direct lending, equity financing and the Central Bank of Nigeria’s Creative Industry Financing Initiative, there is now greater access to financing for your technology project,

To access the Creative Industry Financing Initiative, your business must:

  • Be in information technology, music, movies, fashion or a related business.
  • Be registered with the Corporate Affairs Commission.
  • Submit a bankable business proposal.
  • Have clean Credit Bureau Report, free of obligations.
  • Have satisfactory Credit Risk Management System (CRMS) report of Owners, Sponsors and Directors.

Do you need help to access the creative industry fund for your business? Contact Us Now or email ted.iwere@smefinance.org.

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Fidelity Bank ‘SME Connect’ Matches Founders With Funders

Fidelity Bank ‘SME Connect

Fidelity Bank ‘SME Connect’ Matches Founders With Funders

Fidelity Bank – with its Managed SME Division; which provides one-on-one advisory to its customers, through its Networking With Giants Conference; which partnered with the Africa Youth Entrepreneurship Organisation on Solution to Poverty in Africa; to the Fidelity SME Forum, a weekly radio programme for budding entrepreneurs – is arguably Nigeria’s leading SME-focused banking group.

Adjudged as an SME Friendly Bank by the Lagos Chamber of Commerce and Industry (LCCI); Fidelity Bank has reportedly disbursed N2.3 billion under the Central Bank of Nigeria N220 billion SME Fund Programme. Also, it recently received $50 million from the African Development Bank (AfDB) for disbursement to Small and Medium Enterprises.

Last week, at a press briefing at the bank’s head office on Wednesday, July 3, 2019; Fidelity Bank raised its SME-friendliness one notch. Hence, Nnamdi Okonkwo, Managing Director, announced the bank’s funding initiative for Small and Medium Enterprises; “SME Funding Connect.”

The event was tagged ‘Entrepreneurship Meets Capital’. Howbeit, the initiative aims to provide funding for small businesses through the Fidelity Bank’s funding partners; venture capitalists and angel investors.


Okonkwo was represented by the Executive Director, Commercial and Consumer Banking,  Lagos and South West, Mrs. Nneka Onyeali-Ikpe and Osaigbovo Omorogbe, Divisional Head, Managed SMEs.

Andrew Kevin, Advisory Partner, represented PriceWaterhouseCoopers (PWC), consultants to the project.

PriceWaterhouseCoopers, on behalf of Fidelity Bank, will carefully vet and select the founders and funders before they will be invited to the Fair.

The SME Funding Connect will be a platform for Founders (owners of Small and Medium Enterprises) to meet Funders (angel investors and venture capitalists). Consequently, the Fair will hold in Lagos on August 7, 2019, for SMEs based in the South West; move to Kano in the last quarter of this year, for SMEs in the North, and Port Harcourt in the first quarter of next year, for SMEs in the South East and South-South.

Also, the event, which promises to find the right companies with the right founders to introduce to the right investors, will feature:

  • 3,000 Participants.
  • 60 Founders.
  • 60 Fund Providers.
  • N12 million in grants.
  • Six Breakout Sessions.
  • Three Networking Cocktails.

The event will focus on creating a platform that will support entrepreneurs, by connecting them with mentors, influencers and investors. The goal is to identify early stage start-ups with opportunity for growth, and link them with strategic investors.

For founders looking for how to start their business; the event will provide an opportunity to meet people who can support their dream by investing in their ideas. However, for established founders; the event will offer a chance for them to learn and gain advice on how they can grow their business.

For funders, real investors who will attend the event, the fair presents an opportunity for them to meet company founders and hear their pitches.

The novelty of SME Connect will further consolidate the admirable position of Fidelity Bank as a prime mover in the nation’s SME space, and a proven playmaker with a track record of catering to the peculiar needs of the small business market.

Why should an aspiring or practising Small Business Owner attend the Founders Meet Funders event?

The Founders Meet Funders Fair looks like a sure way to discover Nigerian start-ups and the investors who can make a difference. The Fair is likely to provide a rare channel to source quality deals. It will be a meeting point for investable pre-seed and seed-stage start-ups that are creating products and services that matter, and savvy investors for potentially profitable opportunities.

The Fidelity Bank SME Connect will add significant value to the Nigerian start-up ecosystem. We highly recommend attending this event as a founder or a funder!

CBN’s Microfinance Bank: Right Reasoning, Wrong Decision

microfinance bank

The recent decision of the Central Bank of Nigeria (CBN) and the Bankers’ Committee to transform the comatose Nigerian Postal Service (NIPOST) into a National Microfinance Bank calls for an urgent rethink.

The Governor of the Central Bank and Chairman of the Bankers’ Committee, Mr. Godwin Emefiele, gave three reasons for the decision:

  • Non-disbursement of intervention funds to Micro, Small and Medium Enterprises (MSMEs).
  • High and “outrageous” interest rates charged by existing microfinance banks.
  • Need to revamp the nation’s moribund postal services system.

Under the proposal; the Bankers’ Committee will invest N5 billion in equity from its N60billion Agricultural Small and Medium Enterprises Investment Scheme (AGSMEIS) Fund while NIPOST would contribute its offices in the 774 local governments across Nigeria.

While the three problems pinpointed by the apex bank and the Bankers’ Committee are real and deserve to be addressed; the proposed solution raises some concerns.

Microfinance institutions aim to bring financial services to people who otherwise wouldn’t have them. Their purpose, therefore, is to extend financial tools to those who otherwise would not have access to them.

A for-profit microfinance bank operates about the same way as deposit money banks; although with differing criteria for opening accounts and securing loans.

On the other hand, the functions of a post office are:
  1. Sale of stamps and envelopes.
  2. Sending and receiving of telegraphic messages.
  3. Sending and receiving of money orders.
  4. Receiving and delivery of mails and related packages.

In some parts of the world, beyond their core service; post offices also offer such services as providing and accepting government forms (like driving licence and passport applications); processing government services and fees (like road taxes); and banking services (like savings accounts and credit transactions).

Where is the chemistry between the post office and the bank; in this search by the CBN and the Bankers’ Committee, to cure the ills of the microfinance banks?

The National Association of Microfinance Banks (NAMB) accuses the CBN of blaming the victim.It makes the point, albeit correctly, that the microfinance banks charge high interest rates and don’t disburse cheap funds. However, the Association reminds the CBN of its obligation under the Revised National Microfinance Policy which provides as follows:

“In order to promote the development of the sub-sector and provide for the wholesale funding requirements of microfinance banks and MFIs; a Microfinance Development Fund (MDF), shall be set up by the CBN. The fund shall be professionally managed to guarantee its sustainability. Also, it will provide necessary support for the development of the sub-sector in terms of refinancing/guarantee facility; capacity building; financial education; and other promotional activities.”


The Association says the CBN has failed to establish this fund that is expected to ameliorate their liquidity problems, and assure the sustainability of microfinance banks.

The Association also says that, in neglect of the provisions of the policy under reference, the CBN is yet to create modalities for fostering linkages between deposit money banks (DMBs), deposit financial institutions (DFIs), specialised finance institutions, donor agencies and microfinance institution (MFIs) in general and microfinance banks in particular. Microfinance banks and MFIs are expected to leverage these linkages to source wholesale funds and refinancing facilities for on-lending to their clients.

In furtherance of the foregoing, it is reasonable to request the CBN to implement the above-mentioned policy initiatives, which will create the enabling environment for microfinance banks to deliver on their mandate. Furthermore, the N5 billion equity earmarked for the NIPOST-inspired National Microfinance Bank should be applied to the Microfinance Development Fund, as provided in the Revised National Microfinance Policy.

After or concurrent with that, if the CBN still wishes to revamp NIPOST and the nation’s postal system, and promote financial inclusion, it can consider other options. For example, as obtainable in post offices in other jurisdictions, the CBN could grant an Agent Banking Licence to NIPOST, for delivery of quasi-financial services in the 774 Local government Areas of the country.


In summary, I identify with the reasoning of the Central Bank Governor and the Bankers’ Committee, regarding the non-disbursement of intervention funds to Micro, Small and Medium Enterprises (MSMEs), high and “outrageous” interest rates charged by existing microfinance banks, and the need to revamp the nation’s moribund postal services system, as obstacles in the way of economic development. I, however, do not agree that these problems will be solved by the establishment of a government-backed, NIPOST-based National Microfinance Bank.

This proposed solution does not fit the problems it seeks to solve. It is not likely to work, for the following reasons:


  1. The creation of a national Microfinance Bank will not revamp the nation’s moribund and comatose postal system. Already, these have been effectively crippled by a more practical private enterprise-driven courier service.
  2. The proposed government-run microfinance bank does not contain ingredients needed to reverse the non-disbursement of intervention funds to Micro, Small and Medium Enterprises (MSMEs).
  3. Arrival of the over-arching microfinance bank will not necessarily guarantee the delivery of single-digit credit; and thereby end the regime of high interest rates being charged by existing microfinance banks.
  4. Disbursement of intervention funds to MSMEs and delivery of credit by single-digit credit by microfinance banks can only be achieved if the CBN provides the enabling and regulatory environments to make these happen.
  5. The proposal by the Central Bank and the Bankers’ Committee to engage the Nigeria Postal Service (NIPOST), a wholly-government institution; in a profit-driven venture, runs counter to the idea of getting government to focus on governance; and leaving business to the private sector.

The idea of a National Microfinance Bank defies logic and should be dropped.

Read more at www.smefinance.org

Where Are You In Your Life As An Entrepreneur?

Life As An Entrepreneur

Where Are You In Your Life As An Entrepreneur?

It is possible that you are one of those business owners who believe that your experience as an entrepreneur is different from those of other people who are striving to start, grow or scale their businesses. This kind of thinking is not exactly according to the facts. The truth is that ‘entrepreneuring’ is far more predictable than many business owners will admit. Even more true is that there are some common problems and frustrations that you encounter along the way, just as there are certain proven ways of overcoming them.

Now, let’s get started. Where are you in your climb on the entrepreneurial ladder? Where are you heading? What stands between where you are and where you want to be? What do you need to do to step onto the next rung of the ladder and inch your way toward arriving at your destination?

It will be instructive for you to know where you are, at this point in time, in your efforts as a business owner. The knowledge from this self-examination can be leveraged to strategically plan your way towards the future that you desire.

The Start-Up Entrepreneur:

In this phase of your enterprise, you are just beginning to build your business. You are tinkering with the idea for your business. You are pursuing your vision of what the business will achieve. Your business idea is new in the market.

Life As An Entrepreneur

At this point, you have a few things going for you. You have spotted a gap and a need to be fulfilled in the market. Also, you have a business model that will fulfill this need at a profit. Even more, you have skills that can be deployed to turn your idea into money. You are passionate about what you are doing. You are making little or no money.

In your excitement, you are itching to launch your business. You envision that once you get the business up and running, you will make a lot of money, live a less stressful life, and have plenty of time for yourself, family and friends.

However, what is more likely to happen, once you get started, is that your excitement and optimism will give way to the reality of starting a business. You will work longer hours, have more stress, and less money. You will now discover the new you, the sole entrepreneur.

The Solo Entrepreneur:

You are on your own. Perhaps you are by yourself. You are trying to make your way through the start-up stage. Obviously, you are struggling. Struggling to get the product or service right. Struggling to get revenues flowing into the business.

You are a self-employed individual. You don’t have a team. Perhaps you are trading your time for money. You are trying to keep the business running. And you are finding ways to grow your operations, grow your revenue and build a team. You are trying to find a niche for your business in the marketplace.

In trying to survive and thrive, you will be looking for ways to move away from solo entrepreneurship. Realising you will not achieve much by continuing as a one-man band, you will come to terms with the need to apply the twin business strategies of Specialisation and Division of Labour. You must attract a few good people to complement you. You need these new hands for the varied and specialised skills they will bring into the business, to perform the different functions and activities needed to deliver the products or services of the business.

Now that you have some helping hands, you can revive your vision of working shorter hours and making a more money. And, more importantly, you must start thinking how to grow the business.

The Business Owner:

At this stage of your entrepreneurship, your business is able to pay its bills and sustain itself, even if it is not highly profitable or making a lot of money.

It now has a small and dynamic team that consistently and effectively delivers the company’s products or services, at a profit level that leaves something to continuously re-invest in the business. The business now has a life of its own and is growing and assuming the semblance of a going concern. You have more time and more money. You are living a life distinct from when you were in paid employment, starting-up the business or operating as a solo entrepreneur.

Now, you are truly running the business, instead of the business running you. Already, the business has a structure, and its performance is measured at regular intervals. The business is moving from a small to a medium enterprise, and showing a readiness to scale.

It is now for you to build your business more strategically and more efficiently, and decide what you really want your business to be: A business that allows you to do what you love. A business that you can grow and decide if and when to exit.

For more visit www.smefinance.org

Four Steps To Achieving Your Business Goal For 2019

Achieving your business goals
Two-faced Janus, symbol of January, the Janus month.

Achieving Your Business Goal:

January, which means Janus month, became the first month of the year in circa 700 BC under Numa Pompilius, a Roman King. Janus, in Roman mythology, is the god of gateways and doorways, hence the word, ‘janitor’, derives from Janus.

The two-faced Janus, god of beginnings and transitions, looks back to the past, and looks forward to the future. It literally opens the door to the New Year.

Tomorrow, Monday, December 31, the last day of 2018, heralds January 1, the first day of 2019. As a Small Business Owner, the former provides the rear mirror of 2018, while the latter offers a periscope for 2019. What are the lessons you have learnt, personally and professionally, from the past 12 months, and how can you use them to accelerate the progress of your business in the year ahead?

You were out there in 2018, an unbelievably challenging year. There were difficulties in your business, in your life. But, somehow, you and the business survived. It’s now time for sober reflection, time to recap lessons learned.

In playing your best game of being a Small Business Owner, you are in your natural state when thinking about the future, when setting goals, when making plans to reach them. You also know that being so focused on your goals makes it almost impossible to stay in the present.

This mind set manifests in many ways. You work long hours. You accept work you hardly enjoy. You sacrifice your personal relationships. You endanger your health in expectation of a big pay day.

With one calendar year rolling out, you have another opportunity to hit the re-set button. As Nigeria is entering an election year, amidst an unpredictable fortune in the global marketplace, your business will be operating in an economy that is heading into strong headwinds in 2019.

Achieving your business goal

How do you figure out what to do more, or do differently? Here are some suggestions on where to point your searchlight:

1. Re-Examine Your Business Plan: If you have not reviewed your business plan before you closed for the Christmas and New Year celebrations, do so now. Review the document to ensure that it aligns with the current goals of your business, particularly for the next 12 months.

Also re-affirm the alignment of business plan with the purpose of the business. This big picture will help you to set the goals that will lead to long-term success.

2. Re-Set Your Business Goals: It is important to outline what you want your business to achieve in the coming 12 months. These should be specific company-wide objectives, with expected key results.

Visualise your over-arching goal. Picture the specific steps to achieve it. If your goal is to make money, say exactly how much. Put a figure on it. State why you want to make that amount of money. To expand the business? To hire more staff?

Put your goals in writing. Use this as a constant reference point. The idea is to have a road map, with measurable benchmarks with which to determine if they were achieved by the end of the year.


Writing out your goals gets all staff on board, because they have been part of creating the action plans. It also keeps everyone apprised of the set targets and the milestones for achieving them.

3. Review Your Manpower Needs. Skill up. Determine and start developing the key skills your business will need to be competitive in the New Year. Start implementing your recruitment plan. Consider freelancers and part-time staff as alternatives to full-time employees if you have a tight budget.

4. Mark Your Marketing And Sales Calendar: Pull out your calendar. Mark the activities and events around which you will organise the marketing and sales efforts of your business through the year. This will allow time to mobilise resources and energise the team towards achieving the revenue-generating goals of your business for the year.

With this ground work, you are ready to get your business to a great start in 2019. Taking the time to set the business on the course of success makes it easier for you and your staff to stay committed to the goals of the business, and your vision, in the months ahead.

Do something to set your business up for a running start when the clock strikes 12 midnight tomorrow.  Don’t wait. Start now!

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