TED IWERE: THE SMALL BUSINESS GUIDE Archives - Page 2 of 3 - SME Finance

2019 Budget: What’s In It For Small Business Owners?

In presenting the 2019 Budget to the Joint Session of the National Assembly on Wednesday, December 19, 2018, President Muhammadu Buhari said:

‘’To further support Small and Medium Scale Enterprises, which are the focus of our industrialisation drive, we have set aside the sum of N15 billion for the recapitalisation of the Bank for Agriculture and the Bank of Industry.

‘’In addition, the sum of N10 billion is provided as a grant to the Bank of Industry for the purpose of subsidising the interest rates charged on loans to Small and Medium-Scale Enterprises. This is intended to make it possible for them to access single digit interest rate loans from the Bank of Industry.’’

Continuing, the President said:

‘’A key objective going forward is to further encourage and enable ‘prosperous small businesses’. Our micro, small and medium enterprises will accordingly benefit from improved access to funding, supporting infrastructure and off-take arrangements by Government and larger enterprises. They will leverage the Government Enterprise and Empowerment Programme, and the Anchor Borrowers Programme.’’

The President added:

‘’In addition to the development of Special Economic Zones which will underpin our efforts to move away from a mono-economy, we intend to exploit the comparative advantages of the Six geo-political zones and our 36 states by establishing Six Industrial Parks and 109 Special Production and Processing Centres across all 109 senatorial zones including shared facilities. These clusters will have power, water, and broadband facilities with embedded regulatory services. The clusters will generate vibrant economic activity, stimulate small businesses and create jobs across the length and breadth of Nigeria.’’

Given these projections, what can Small Business Owners look forward to in the 2019 Budget? Does the President’s Budget instil confidence and certainty for small businesses? Are there areas of concern to Small business Owners that the 2019 Budget did not address?

The implementation of the provisions, and achievement of the objectives, of the 2019 Budget, as it concerns Small and Medium Enterprises, will definitely enhance their chances of success.

The Bank of Agriculture currently has a negative capitalisation, having depleted its loanable funds. Consequently, its share of the N15 billion grant earmarked for it (and the Bank of Industry) will bring the now-comatose development finance institution back to business.

Besides its share of the N15 billion recapitalisation fund, the Bank of Industry will also receive N10 billion towards subsidising its interest rates on loans to Small and Medium Enterprises. At a time the Bank of Industry claims to be advancing credit to its clients at single-digit rates, and these clients allege that the interest rates on the credits they receive are in double-digits, this subsidy has the potential of making the bank’s loans more affordable to its borrowers at the recommended single-digit rates.

There is also the promise of the 2019 Budget to enable ‘’prosperous small businesses’’ to ‘’leverage the Government Enterprise and Empowerment Programme, and the Anchor Borrowers Programme.’’ The 2019 Budget or the Federal Government does not define ‘’prosperous small businesses.’’

Perhaps subsequent pronouncements on the Budget and related matters may clarify that. Suffice to say that this provision may be Government’s response to the persistent and growing complaints of Small Business Owners and target beneficiaries of the aforementioned programmes, to wit: The Programmes inhabit the fertile imaginations of their creators or live in the realm of good intentions and, when they exist, their success stories are overly exaggerated.

This is in spite of claims like the one made by the President during the Budget presentation when he said: ‘’The Government Enterprise and Empowerment Programme has seen to the disbursement of 1,378,804 loans to small businesses and farmers in all states including the FCT. These are interest free loans that will be paid back.’’

Government equally plans to create Six Industrial Parks (one for each geo-political zone) and 109 Special Production and Processing Centres (one for each senatorial zone), all with such shared infrastructural facilities as power, water and broadband internet. These clusters aim to generate economic activity, stimulate small businesses and create jobs.

These are laudable projects but there is doubt about their faithful and timeous implementation during the plan period, because the Budget is for an election year that is pregnant with uncertainties.

Be that as it may, a major concern of Small Business Owners not addressed by the 2019 Budget is the ease of doing business. According to the World Bank annual survey, Nigeria dropped from 145 in 2017 to 146 in 2018 in a ranking of 180 economies. Vice President Yemi Osinbajo, head of the Presidential Enabling Business Environment Council (PEBEC) that seeks “to remove bureaucratic constraints to doing business in Nigeria, and make the country a progressively easier place to start and grow a business”, underlined the challenge when he said:

‘’When a potential business owner wants to register a company, collect tax clearance certificate or obtain NAFDAC registration or SON certification, expatriate quotas, any other papers, approvals or certification from government and we do not willingly and efficiently help him or her, we are killing the jobs and prosperity that he would have created.”

That’s right. Government must pay greater attention to improving the ease of doing business which, in turn, will help achieve the objective of the 2019 Budget and enhance the environment for Small and Medium Enterprises to survive and thrive.

Buhari’s Proposed Entrepreneurs Bank: One Bank Too Many!

It is widely proclaimed, and generally believed, that access to finance is the biggest single problem facing Micro, Small and Medium Enterprises in Nigeria. Many experts cite the counter narrative that shortage of technical know-how, executive capacity and limited market opportunities are far bigger obstacles to entrepreneurial success.

Be that as it may, the Federal Government remains unrelenting in its search for solutions to the financial problems of Small Business Owners and Independent Professionals. It has a growing range of policies and programmes that seek to provide debt and equity support for new entrepreneurs through access to soft loans.

In pursuit of this objective, in furtherance of his campaign for re-election in 2019 for a second term of four years, President Muhammadu Buhari recently said his administration will establish an Entrepreneurs Bank which will offer cheap funds for Micro, Small and Medium Enterprises.

This plan raises one question: Is a new bank for entrepreneurs the answer to the problem of financing small businesses in Nigeria?

The track record of institutions created for the same reason and purpose suggest otherwise.

Nigeria now has not fewer than three development finance institutions, each specially set up for the sole purpose of lending investible monies to entrepreneurs. Fully or partly owned and funded by the Federal Government, they include the following:

1. Bank of Industry, currently Nigeria’s leading development Bank, focuses on lending to such industrial and value-adding sectors as manufacturing, agro-processing and entertainment. It extends credit to entrepreneurs at about Nine percent interest rate.

2. Bank of Agriculture concentrates on providing loans to farmers and enterprises in the agriculture value chain. Its interest rate is five percent.

3. Development Bank of Nigeria started operating in 2016 and aims to increase lending to Micro, Small and Medium Enterprises. It lends its funds through commercial banks, microfinance banks and related financial services. Its official interest rate is single-digit but reports indicate that end users pay 13 to 16 percent.

At its present operating volume, the loans and advances that the Bank of Industry is granting small businesses are relatively small to make the desired impact, given the size of the demand. Furthermore, the Bank of Industry needs to reduce its interest rate and increase its loan volume, to enable it re-direct focus towards making Nigeria a producer nation, with output that would lead to economic growth.

The current capitalisation of the Bank of Agriculture, which exists to lend money to farmers at five percent interest rate, is negative. The Federal Government’s promise to recapitalise it with N250 billion by this month (December 2018) is yet to materialise.

Consequently, there is hardly any activity at the Bank of Agriculture since it does not have money to lend to farmers.

It is notable that BoA is not even a key player in the Anchor Borrowers Programme under which the Central Bank of Nigeria has disbursed N150 billion in two years to farmers of selected agriculture products.

Unlike BoI and BoA which are sector-specific, the Development Bank of Nigeria lends across all sectors of the economy. This positions it to serve the estimated 37 million MSMEs in Nigeria. Unlike BoI and BoA which started with seed money provided by the Federal Government, 100 percent of DBN’s initial capital of $1.3 billion is from long-term loans from international development finance institutions.

If this solid financial foundation is grounded on the strong corporate governance expected from its international ownership structure, and the bank succeeds in managing the risks associated with advancing credit to its target market, the DBN may emerge as the model to making loanable funds available to Nigeria’s Micro, Small and Medium Enterprises.

What the foregoing scenario indicate is that, with three development-oriented banks in operation, all targeted to Small Business Owners, Nigerian entrepreneurs don’t need another bank for entrepreneurs. What the Buhari administration needs, if it gets a second chance, come 2019, is to examine why the Bank of Industry and Bank of Agriculture are struggling with their mandates. If nothing else, it is clear that they need to be adequately funded and professionally managed.

In the face of the shortcomings of the existing institutions, to start another bank for entrepreneurs will be a waste of money on another development finance institution at a time the ones set up for the same reason are yet to achieve their objective of funding Nigeria’s Small Business Owners.

The establishment of these institutions must be guided by the need to balance the achievement of development impact with attainment of positive financial bottom lines. They must not be pawns on the chessboard of political sloganeering.

For these reasons, the  message for the Buhari Presidency is obvious. Strengthen the Bank of Industry through diversification of its sources of working capital, thereby enabling it to broaden and deepen its credit coverage. Re-capitalise the Bank of Agriculture so that it can deliver on its mandate. Consolidate the position of the Development Bank of Nigeria as Nigeria’s model development finance institution.

Duplicating them is not a viable option!

Six Ways To Reach Your Target Audience

A key reason for the existence of your business is to serve its customers.  It therefore follows that your new business must have a target audience before it starts, and also court it as it strives to grow. But how would your business acquire customers? Here are six low-budget channels your business can use to reach its target audience of potential customers:

  1. Media Relations: Relationships with the media are key. Build relationships with relevant bloggers and journalists. Reach out to bloggers. Get them to review your product or service. Submit guest posts to their blogs. Comment on industry blogs and Forums.
  2. Content Marketing: One way to acquire new customers is to leverage the power of content marketing. People are always seeking information relevant to their lines of work. They search for how-to guides and articles that address issues of interest to them. Creating and giving away information that is not generally available will help drive traffic (and customers) to your business.
  3.  Email Marketing: This involves sending marketing messages via emails. Do you have an email list? If you don’t, create one. An easy way to do this is to offer a free newsletter, which your target audience can sign up for. In the process, you will collect their personal and contact details, which you can then use to send them information on products or services they can buy from your business.
  4. Work With Partners: Look for businesses that are starting out like yours or are in their early stages of growth, and are providing complementary products or services. Explore ways of marketing each other’s products or services.
  5. Search Engine Optimisation (SEO): SEO helps your business to show up when your target audience searches keyword(s) in your niche. Use Google keyword tool to identify keywords around which you can create content.

These efforts will help you get in-bound links from blogs, online forums and related digital channels which, in turn, will boost your ranking in search engines.

  1. Social Media Marketing (SMM): SMM helps your business to interact with potential customers and thought leaders in your market. Build your online presence. Leverage Facebook, Twitter, Linkedin, Instagram, YouTube, etc. as you search for new customers in your target audience.

As you experiment with the different customer acquisition channels, you should continuously review your results from each of them. Do more of what is working, and do less, or eliminate, what is not working.

How To Survive Your First 12 Months As Small Business Owner

The first 12 months of a start-up is possibly the toughest one year for a Small Business Owner. The freshly-minted entrepreneur is at once excited and scared; excited at the thrill of setting out on a new venture, and scared at the challenges that need to be overcome in the strive to achieve success.

What can you do to brighten the prospects of your business making it through its first year, and be in a position to move to the next level? A few suggestions:

  1. Keep Your Eyes On Your Business Plan: Now is the time to fix your attention on your Business Plan. Before launching your business, the ideas that were floating in your head about the business must have been reduced to a Plan of Action. This plan must have helped you to clarify your thoughts, and identify the things you must do to transform your idea into a business. The plan organises your thoughts, creates solid objectives and specific sales goals, and becomes the map for your journey into business. In the same way that a navigator constantly pulls out his map to get his bearing right, your Business Plan must be your compass, your guide, your constant companion. Your Business Plan is the canvas on which to run your business. As a Small Business Owner, you must follow your Business Plan religiously, and only deviate when conditions and common sense dictate that you correct your course.
  2. Manage Your Money. As a Small Business Owner, you must ensure that your business does not run out of money. One way to make sure that this does not happen is to keep your expenses as low as possible. You must focus your expenses on the things that are absolutely necessary for the business to keep running. Limit your recruitment to employees who are critical to the running of the business. All other positions must wait or be filled with contractors and freelance workers whose productivity must be linked with the cost of engaging them.
  3. Measure Your Marketing Results: Based on your Business Plan, originating from your research on the most efficient and effective ways for your business to reach its niche customer, your business must spend money on sharply-focused and strategically-planned marketing campaigns. Start marketing to build a following. Results of these efforts must be measured with the objective of getting your sales gains to outweigh your expenses.
  4. Review Your Finances Each Month: You must run your start-up on a shoe-string. Every expense item counts, which is why you must keep score of your expenses at least once every month. The monthly financial statement obtained from this exercise will let you know whether the little money you have is being spent on the right things. This will help you to plug any cash leakages, and determine if your expenses are aligning with your Business Plan.
  5. Leverage Your Network: Remember the saying. Your network determines your net worth. This is also true for a new Small Business Owner.

Grow your network. Attend networking events. Network via LinkedIn, Facebook, Twitter and Instagram. Join your local Chambers of Commerce. Explore strategic alliances.

Your family. Your friends. Your colleagues. Your industry. Leverage all of them in your search for potential customers or referrals. Ask them for leads to people and businesses that can patronise your product or service.

Political Economy Of Small Business: SME As An Election Issue

We are in the season of politics, in the run up to the series of elections lined up for the first half of 2019. From now till next May, the nation will be selecting and electing the crop of leaders, from Legislators through Governors to the President, who will govern its affairs for the four years beginning mid next year.

As we know too well, politics drive economy. It is the policies and programmes initiated and implemented by the political class that determine the presence or otherwise of a conducive environment for businesses to operate. What this means is that politics is too important to be left to the politicians!

This is where the Small Business Owner must step in and be an active participant in the selection and election of the leadership cadre.

The spirit of enterprise is strong and growing in Nigeria. Estimates by the National Bureau of Statistics indicate that the country has 37 million micro, small and medium enterprises (MSME), which contribute not less than 48 percent of the nation’s Gross Domestic Product, and employs not fewer than 60 million people.

At a time when there is rising concern about diversification of the economy, the potential impact of MSMEs and the role of government in making these happen becomes even more significant. It is, however, common knowledge that small businesses face a myriad of challenges. In addition to the time-worn sing song of weak infrastructure, we have the usual suspects: ease of doing business, flips and flops in government policies, multiple taxation, access to finance, shortage of expertise, under-developed markets, etc.

Access to finance is arguably the elephant in the room. Banks recognise MSMEs as revenue sources through the grant of credit. They, however, remain wary of funding them, because they are yet to find a formula for managing the risks of advancing credit to this vital sub-sector of the economy.

In this regard, three key enablers are expected to drive a viable credit system: Credit Bureaus, Collateral Registry and a Unique Identification System. While the Central Bank of Nigeria and the financial institutions are working to put these in place, with a view to de-risking lending to MSMEs, it is important for Small Business Owners to know where the candidates stand on these critical issues, and whether they are inclined to stay the course and work towards seeing them to fruition.

Between access to finance and capacity-building, it is hard to say which one comes first; just like the chicken and egg puzzle. A casual conversation with some Small Business Owners will easily reveal that if you give them money to start a business, it will be a matter of time for you to realise their situation: A fool and his/her money that will be parted in a matter of time. The truth is that many Small Business Owners, or those who aspire to be, do not have the expertise or absorptive capacity to put credit into productive use.

Furthermore, entrepreneurial capacity remains a great challenge for small and medium businesses in Nigeria. The ability to function optimally in the key strategic areas of management, operations, marketing and finance is sadly lacking in many would-be entrepreneurs.

The good news is that we are beginning to find private and public sector-driven initiatives for business start-ups. Examples include the Enterprise Development Centre (EDC) of the Pan-Atlantic University which provides advisory, mentoring, networking and related support services for budding entrepreneurs; the Fate Foundation which runs boot-camps and short-term certificate courses for its aspiring, emerging and special entrepreneurs; and the Lagos State Employment Trust Fund (LSETF) which offers training to improve the operational, managerial and financial competence of trainees seeking to start new businesses.

Next to credit and capacity-building is the challenge of access to markets. It is vitally important to bring Small Business Owners and big companies together, to enable them start relationships and create buying opportunities for their products and services. Small businesses need assistance to key into the value chain of large organisations, to enhance their capabilities to develop local content and participate in diverse sectors of the national economy.

Finally, because markets are structured around government regulations and policy influences, and businesses must match their operations with the intentions of government, Small Business Owners cannot be aloof to the mind-set of persons who seek their consent to get elected into public offices.

Small business Owners bear the responsibility to know the candidates to root for.

What is his or her framework for managing the economy? Does he or she believe that government must be hands-on on the economy (and business) or that the economy should be in the hands of the private sector, with the role of government being limited to providing the regulatory and enabling environment? What is his or her vision for small business?

Yes. Small business is an election issue. You, as a Small Business Owner, cannot afford to be an innocent bystander. You are a stakeholder in the Nigerian experiment. You must seek to understand what each candidate stands for, and know whether he or she promotes policies and programmes that will help your business to survive or thrive. Or, holds a worldview that will make your business to wither and die.

The choice is yours. Choose wisely!

Jim Ovia: Poster Boy Of Nigerian Banking

Diminutive Jim Ovia, Chairman of Zenith Bank Plc, at the Eko Hotel and Suites, Victoria Island, Lagos, on Monday, September 17, 2018, launched his much-awaited autobiography: ‘‘Africa Rise and Shine: How a Nigerian Entrepreneur from Humble Beginnings Grew a Business to $16 billion.’’

In headlining the main point of the book, Mr. Ovia writes:

“In the course of Zenith Bank’s own journey to “rise and shine’’, the business began as a single branch in Lagos on the ground floor of an impoverished resident duplex that we shared with a private a private tenant and his wife. At the time, there were no high-rise office structures in the area, and we were not able to afford a stand-alone building of our own, so we created an impromptu commercial space where we could carry out the banking business. We put up our signage and logo, but truly it did not resemble an office or a bank at all.’’

In summary, Mr. Ovia writes: ‘‘That unassuming duplex was the starting point for a business that became a London Stock Exchange-listed company with operations in the UK, China, UAE, Ghana, Gambia, Sierra Leone, with more than 400 branches and business offices in Nigeria”

Understandably, the author of the book received rave reviews at its launching. Here is a sampling of the reviews:

“There is nobody that will read this kind of book and will not be inspired and I want to recommend it to everyone. It is always very good when people who have been successful in their career or profession decide to say something about how they really toiled to get to where they are.

“Some people just think people get to be successful without knowing that they actually toiled to become successful and this kind of book inspires our younger ones to become more resourceful and then more inspiring.”

   — Akinwumi Ambode, Governor, Lagos State.

“There are different types of Godfathers. There’s political, religious, economic and so on. Jim Ovia is my economic Godfather. He will not defect like my political Godfather. Economic godfathers stick with you rain or shine.”

— Emmanuel Udom, Governor, Akwa Ibom State.

“Jim Ovia will be prominently cited as one of the founding fathers of Africa’s modern banking system. Africa Rise and Shine enshrines how Ovia pioneered the creation of one of the continent’s most successful banks, and demonstrates how believing in yourself, aiming for excellence, building a team, and listening to your gut-all with and unwavering ethical stance-frame the model for the next generation of great entrepreneurs anywhere. Jim Ovia’s story re-defines the power of today’s self-made man.”

 — David Applefield, Financial Times.

‘‘There are quite a number of nuggets to learn from this book. That said. This is what was missing for me. There were really no failure stories. I know we want to read a success story but successful entrepreneurs share their failure stories too. I think it demonstrates that the path to the top might be tough but worth it in the end. I wanted to learn more about the politics of banking in Nigeria, the challenge of hiring the right people and having great people leave. I wanted to know if they ever had any close calls and how they made it through those years. I wanted to know if he had ever had to fire someone he really liked before because he had to choose the business.’’

 — Tomie Balogun, Investment Consultant.

Mr. Jim Ovia, the subject matter of the book, ‘‘Africa Rise and Shine’’, which is essentially the story of how he started Zenith Bank in the late 1980s with N20 million and ballooned it into a $16 billion enterprise, is arguably a poster boy of Nigerian banking.

Great job, Jim!

How To Grow Your Business With Internally-Generated Funds

How To Register Co-Operative Society In Nigeria

“The world we live in today is run by mega-corporations, ultra-successful entrepreneurs and internet gurus who invested all their time, money and efforts in entrepreneurship. All the products that we use in our homes, in restaurants and even in the offices are all a result of someone who sacrificed their savings and decided to risk it in a business.”  

                                                                                                                                               — Marco Carbajo


Saving money, according to Napoleon Hill, is the foundation of all financial success, including investing. The ability to save money is the starting point of building wealth.

In order to fund your own business, you have to overhaul your saving habits and get a better grip on your financial situation. Here are some ways to get the ball rolling.

  1. Invest In Interest-Bearing Accounts

It is good to keep your money in an interest generating account for some time while carrying out feasibility study on your proposed business or when considering the need for business expansion. Interest bearing investments include your bank account, a certificate of deposit, or any other kind of investment in which you receive interest from the principal.

  1. Start Budgeting

Budgeting is an important part of any business, so if you haven’t started a budget yet, this is the time. Without a budget you may not know how your business is performing. A budget provides an accurate picture of expenditures and revenues and can help drive important business decisions.

  1. Minimise Costs

 When starting a business, you must bear in mind the need for cost minimization. Buy used equipment instead of new ones. One mistake many young entrepreneurs have been doing is starting a business with brand new equipment or machines. This is not the way to go. It is expensive for you considering the fact that you do not have a lot of money to play around with. Without conserving cash flow, businesses would rarely grow. Also, buy goods or office supplies in bulk because such purchases always attract large discounts.

    1. Get Rid Of Your Debts

    F. Jimoh, advising on how to get rid of your debts, says: “Debt is a fatal enemy of savings. The man bound in the slavery of debt is as helpless as the slave bound by ignorance, or by actual chains. Debt has a tendency to draw its victim deeper and deeper into the mire.” It is important to start your business on a clean slate, this way you can focus more on the profits being generated. When you get rid of debt, you’ll feel like you got a raise. Suddenly all of that money that was going towards repaying a debt can be put towards running your business.

    1. Re-Invest Your Profits

    While your natural inclination is to start spending the money you make from your new business, it’s a much more sound practice to reinvest your profits. This will allow you to continue growing without needing to take on debt.

    1. Start Small

    We have seen people go into the business with both feet ­ and succeeded. However, for those with little capital, the best way to start a business is to go slowly.
    Start your business in accordance with your financial strength. You may have a grand business idea but it’s better to start small if you have minimal capital and/or little business experience.

    1. Run Your Business From Home

    Rather than waiting to raise cash to rent office space, it is advisable run your business from your home. This is one of the easiest ways you can start saving a lot of money that comes into your business.



    Although, this article is a slight deviation from our usual business law write ups, we consider it necessary to focus on the above topic because we live in a day and age where most entrepreneurs assume that you must borrow if you want to start a business. The borrowing mentality stems from the fact that most aspiring entrepreneurs usually don’t have enough cash to start a business. Also, some are not willing to put forth the sacrifice it takes to actually save for business. Others are not even confident that they can possibly save up the money needed to fund a startup.

    However, it only makes sense that you put your money where your mouth is. If your idea is as brilliant as you say it is, you should have no problem committing some of your own hard-earned money to it! Saving a reasonable part of any money you receive is a good start to raising the capital you need for your dream business. It is usually easier to convince your friends, family, investors and banks to give you capital if you already have some of your own money invested in your idea or small business. It’s a sign of confidence and a show of faith that you believe the business idea is worth it.

    Therefore, if you’re really serious about your dream business, you need to start making both small and big sacrifices to ensure that you save more from your current earnings.

    This article is provided for general information purposes only. It does not constitute advice or an opinion on any specific facts or circumstances. If you have any enquiries about this article or require further information, please contact the writer  at [email protected]

If Ishiba Is Real, Where Is The Grant?

Dr. Evangelist Elizabeth N. Praise, Founder, Ishiba Development and Empowerment Centre

Question: I registered for Ishiba Grant last year. Since then nothing has happened. Can someone give me latest update from Ishiba?

Answer: You know this is a grant that will touch and help many of us in Nigeria. So, they (Ishiba) are working with all necessary organisations to make it come true.

Question: What about those of us that filled forms from two NGOs? We didn’t know they are from the same organisation. Moreover, we don’t know the one that would be true.

Answer: Ishiba cannot answer that question. Because, on a daily basis, apart from grants, Ishiba is looking for the best ways to assist as many people as possible. Ishiba is helping on health, employment, etc. Ishiba is busy thinking of how to help the less privileged. Rest assured that the grant will come.

Question: I registered earlier this year. I am through with my verification. We were supposed to attend our training last week Saturday in Nsukka, Enugu State. But the training did not hold. What is our fate?

Answer: A patient dog will surely eat the fattest bone. Stay calm. Your future is bright.

Question: When, exactly, is disbursement of the grant likely to commence? My hope is fading.

Answer: Let me use a word for you in the Bible. ‘‘I show a waiting attitude.’’ Micah 7:7. So, be more patient.

What’s going on here, a socratic dialogue? Not exactly. The questions are from Nigerians who have signed up for membership of Ishiba Development and Empowerment Centre, which claims to have grants of up to N10 million for Nigerians who want to start small and medium enterprises.

The accompanying answers, possibly apocryphal, are from a faceless pair of Ademuyiwa Olutayo and Olatunde Damilare, who seem to be speaking for, and on behalf of, Ishiba. To rate the answers as vague and evasive will be charitable and generous. Be that as it may, what is Ishiba Empowerment Programme about?

Ishiba Development and Empowerment Centre presents itself as a multi-purpose co-operative society founded by Dr. Evangelist Elizabeth N. Praise and registered at the Corporate Affairs Commission on August 25, 2016. Ishiba promises to combat poverty, hunger and social injustice.

Ishiba says it operates in the 36 states of the Federation, through state co-ordinators, with similar representation in the Federal Capital Territory, Abuja. It says it teaches people the way of God, organises agriculture-related seminars and workshops, and skills acquisition programmes. Ishiba also claims to be ready and able to disburse grants to its members who want to start, run and grow their businesses.

Ishiba says it will establish between 10 to 25 microfinance banks across Nigeria, including Abuja. It says each of these microfinance banks will get One billion Naira to empower millions of Ishiba members.

Ishiba says its funding is a grant, not a loan, meaning that grantees will not re-pay monies disbursed to them. Ishiba says its members who have applied for grants for projects costing between hundreds of thousands to 10 million Naira will receive their monies when it (Ishiba) receives the international grant it is waiting for.

While the waiting for the international grant continues, more questions arise. What is the Ishiba business model? Where does Ishiba get its money from, and how does it sustain its grant programme? Ishiba, which says it has converted its co-operative society to a non-governmental organisation (NGO), is signing up more Nigerians for its yet-to-be fulfilled grant programme.

The Ishiba call-up says: ‘‘Don’t be left out. Grab a Form. Fill it. Choose your desired business project and you will get the funding.’’

To become an Ishiba member, and qualify for Ishiba Grant, you have to register with it. Membership Form is N500. Certificate costs N1,000. Charge for general logistics: N500. Total cost to register for Ishiba Grant is N2,000.

What are the benefits of membership? Registration, and attendance of a seminar organised by Ishiba Development and Empowerment Centre, confers full membership, and automatic qualification to access Ishiba Grant.

A member is also qualified to attend seminars and workshops organised by Ishiba, which may be in Agriculture, Health Care, Skills acquisition or Mentorship in a trade; and to receive a certificate (costing N1,000) after each seminar or workshop.

Furthermore, a member may apply, or recommend communities, for projects, which can be sponsored by Ishiba or through its sponsors.

The Founder of Ishiba Development and Empowerment Centre, Dr. Evangelist Elizabeth N. Praise, (who adherents reverently call ‘‘the Queen Elizabeth of Nigeria’’ who has come to deliver Nigerian masses from poverty), is reportedly working tirelessly to make the Ishiba dream come true.

Ishiba strives to distance itself from the dubious MMM or similar ponzi schemes that promise stupendous returns, then turn out to be dupes. But, judging by the way Ishiba is working, Nigerians are wondering if this is not a scheme for parting them with their hard-earned N2000! In fact, the Nasrul-Lahi-l-Faith Society (NASFAT), warns its members to shun Ishiba Grant because it has ‘‘elements of doubt.”

NASFAT, in doubting Ishiba, says: ‘‘The name of the group is different from the name of the bank account being circulated for members to pay money into. The group does not have any traceable office or contact details. It is not registered as a microfinance bank or financial institution in Nigeria. In addition, no evidence of United Nations grants of any form similar to Ishiba.”

NASFAT cautions: ‘‘We strongly advise that our youth members should refrain from the group and be more vigilant as to carefully choose where to invest their money. To be forewarned is to be forearmed.”

Given these red flags, Nigerians must, again, ask Ishiba: Is Ishiba real? Where is the grant? Has any member received Ishiba Grant? If anyone has received it, Nigerians will want to hear from him or her. That will be a story to be told. For now, with the growing doubts, Nigerians, particularly those considering registering with, and applying for, Ishiba Grant, are advised to heed the age-old advice: Buyer beware!

YouWiN Connect: Looking Like Government 419

Remember YouWiN? Sorry, it’s now YouWiN Connect.

YouWiN began as a National Business Plan Competition initiated by the Federal Government under the administration of President Goodluck Jonathan. It set out to encourage enterprise, help grow small businesses and create jobs. It invited young Nigerians to submit their business plans online, and these were evaluated by a panel of judges who selected the most promising ideas. Successful candidates under the YouWiN scheme received start-up or expansion funds in the form of grants or concessionary credit, and supported with training and mentorship services.

When the Muhammadu Buhari administration inherited the scheme, it re-christened it YouWiN Connect. Under YouWiN Connect, aspiring entrepreneurs indicate their wish to participate in the scheme by registering at an online portal. Qualified and shortlisted applicants then undergo online training in entrepreneurship, with special concentrations in business planning, access to finance and markets. After the online training, successful participants proceed to industry-specific masterclasses, after which they are awarded certificates of participation. They round up with the submission of business plans for starting and/or expanding their businesses.

Preferred industries include, but are not limited to, fashion, manufacturing, retail, construction, information and communication technology, agriculture and agro-processing.

Whereas the Buhari administration changed the name of the programme from YouWiN to YouWiN Connect, current participants are under the distinct impression that the grant funding component of the scheme remains.

This, however, has become contentious. YouWiN Connect graduates are saying the Buhari government is not funding their business plans as promised. And the Buhari Government is saying it did not promise start-up grants to YouWiN Connect participants at the end of their training.

The climax of this dissonance is the raging controversy between YouWiN Connect ‘beneficiaries’ and the Ministry and Directorate responsible for the programme. A group that calls itself 2017 YouWiN Master Class Attendees, and claims to represent 5,000 participants, now describes YouWiN Connect ‘’a monumental government-sponsored scam.” The group staged a protest march at the offices of the Federal Ministry of Finance in Abuja on July 31, 2018.

They had joined the programme in 2017, completed training last March and, beyond receiving certificates of participation, nothing has happened since then. Specifically, they say that, despite what they were told at the beginning of their training, successful participants are yet to receive the promised one-year business development funding support for their start-ups or similar funding to expand their businesses.

And what’s the Federal Government saying?

Embattled Finance Minister, Kemi Adeosun, in a YouTube video on the YouWiN Connect website, refers to the programme as a re-brand of the youth enterprise scheme inherited from the Goodluck Jonathan administration. She says the Buhari government will support YouWiN Connect businesses through equity funding.

Hear her: “Equity funding is where government is saying it will come in with a fund manager. It will invest. It will take a share in the business. As you grow, you buy us out and we take that money and invest in the next person.”

While the option of equity participation in YouWiN Connect businesses is one way to go, that seems to be different from what successful trainees will want to hear. They repeatedly say they were promised grants and soft loans, which are not the same as equity. Simply said, grants are free monies, outright gifts, from government, not to be re-paid, while soft loans, disbursed at next-to-nothing interest rates, are next to free money.

To say it differently, YouWiN Connect participants will not be able to access grants or soft credit, as they claim to have been promised, and was generally believed by them. They will now, willy-nilly, have government as their business partner, under the equity option being proposed by Finance Minister Kemi Adeosun.

Troubling as the Ministry’s equity option may be, what should be more worrisome is that the YouWiN Connect Directorate is not in a position to start implementing it. According to Premium Times, the Director of YouWiN Connect, Dennis Chukwu, says the Buhari administration removed grants as a funding option, which was part of the programme under President Jonathan. Reason: Lack of money to give grants, which involved giving money without expecting people to pay back.

Fair enough. But one questions remains: Why can’t the equity investment option begin, if the grant option has been scrapped?

Hear Dennis Chukwu: “Yes, things are being delayed, because of the way things work (bureaucracy). But, I think some people (the youth) are just impatient. Nobody has changed anything. The process of setting up a fund cannot be done overnight. It has to follow the public procurement process.’’

Really? Why enlist 5,000 participants in the programme when there is no funding plan to support them? What would be the value of the enterprise education and capacity building being offered by YouWiN Connect if the Federal Ministry of Finance, its Directorate and, indeed, the Federal Government, are taking forever to put their money where their mouth is?

Somebody, somewhere, should tell us another story. This one does not add up!

Late Payments: How Big Business Preys On Small Business, And How To Stop It!

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The aspiration of many small businesses is to sell products or provide services to larger organisations with stronger brands, in the hope that such relationships will help them build and run successful businesses.

But, as it often turns out, many large organisations take too long to pay the small suppliers who depend on reliable, regular invoicing to cover their own costs.

It is common knowledge that larger firms are responsible for much of late payments made to Small and Medium Enterprises. Small Business Owners frequently complain that firms bigger than their own are responsible for most of their total late payments.

And the culprits, come from all sectors. From food and beverage, to banking and finance, through telecommunications and oil/gas conglomerates. Oftentimes, disappointingly so, the late-paying clients are well-known organisations that can afford to pay sooner. They know themselves, hence there is no need to name and shame them.

These big businesses unashamedly abuse their position in the food chain and neglect and/or refuse to pay their bills on time. What this means is that they take unfair advantage of the reliance of small businesses on securing and retaining their patronage; and openly use small businesses as an alternative to banks.

What are late payments and what effects do they have on the operations of small businesses?  These are debts that are overdue by at least one or more given periods. Payment terms average 30 days long. Small businesses are often forced to wait between 30 and 60 days, and, sometimes, up to 90-120 days, to get paid for products sold or services rendered.

For some big businesses that act in ways that border on the unethical, they could engage in delaying tactics. Even when contract terms require an invoice to be settled in 30 days, payments almost always take longer. It is not uncommon for a 30-day invoice to be queried, for real or conjured ‘error’, on the 30th day, and the debtor will gleefully return the invoice to the bottom of the pile for another 30-day wait!

The effects of late payments on small businesses are many. They put the expansion plans of small businesses on hold as they cannot invest in their businesses and grow to their full potential. They are unable to buy new equipment. They cannot pay or hire staff. They spend time and money chasing late payments.

The corporate Goliaths must not be allowed to continue this business as usual, whereby their unequal relationships with small businesses means that small businesses routinely suffer from late payments. How can small businesses take the pain out of late payments? What should Small Business Owners, and government, do when client payments are delayed?

Small businesses must work hard to maintain good housekeeping and sensible credit control procedures. They must invoice regularly and hold clients to their terms and conditions. They also need to track and monitor their payments, chase them, send reminders and have cut off points beyond which they cannot extend credit.

New clients must be assessed for credit-worthiness and, when inevitable, the business must be bold enough to let some work pass.

It is also suggested that businesses that experience late payments should be entitled to charge interest, in addition to the base cost. Understandably, Small Business Owners are reluctant to charge clients interest, for fear it may impact on their relationships with the larger businesses who could always use someone else.

Which is why government must step to buck the trend. Because small businesses don’t have the power to take on big companies, government must respond to the calls for a level playing field in payment practices. Beyond acknowledging the contributions of small businesses to the nation’s Gross Domestic Product, and making funding available for the profitable running of their enterprises, the time has come for Government to create an Office for Small Business Debts, akin to the Consumer Protection Council (CPC), and headed by a high-ranking appointee, with the power to act as a national champion for small businesses and receive complaints from SMEs, towards resolving payment disputes involving their bigger brethren.

It would also help for the various Chambers of Commerce to take this as a cause, and call for legislation along the lines of the European Union’s Late Payment Directive. The Directive aims to achieve ‘a decisive shift to a culture of prompt payment’ and requires debtors to pay interest and the reasonable recovery costs of the creditor if they do not pay for goods or services within 60 days for businesses and within 30 days for ministries, departments and agencies of government.

Government should consider, and enact, a similar law, to prevent small businesses from continuing to be preys in the hands of big businesses.

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