The Bank of Industry has said the country’s entrepreneurs are not in the habit of repaying loans, and says the portfolio of non-performing loans given to entrepreneurs is between 80 and 100 percent.
The bank’s executive director, Olukayode Pitan, announced this recently at the first edition of the community engagement development workshop organized by the University of Lagos’ Arthur Mbanefo Digital Research Center (AMDRC) (UNILAG), Akoka.
The workshop on the subject; âBuilding the Nigerian Economy for the Immediate Future: The Role of Innovation, Entrepreneurship, and Startup Creation,â featured academics and industry leaders, including the director of the University’s Institute for China Development Studies, Olufemi Saibu; Among others, Head of Program Migration for Development at the German Society for International Cooperation, Sarah Alonge, and the Director, Entrepreneurship and Skills Development Center of UNILAG, Sunday Adebisi.
The lawsuit from BOI
In his presentation, Mr. Pitan listed some of the conditions under which it is difficult for Nigerian startups to obtain credit from the bank. He said if the right steps are taken, startups can get up to N10M in loans to expand their business initiatives.
âYou can get the loans without bringing your house as collateral. All we need are two guarantors and I can tell you that most Nigerians struggle to get two guarantors because they know them. We need the BVNs of these guarantors and a few things, but they don’t give them because they know people. So we say if people who know you don’t want to give you guarantees, why should we believe in you? âHe said.
He said another thing the bank has tried is to introduce matching grants that involve around 20 states.
said Mr. Pitan; âWe’ll go to your state and tell the governor that we’ll top up any amount you give us. We lend the money in your state, but I can tell you that the bad loan ratio so far has averaged between 80 and 100 percent.
âPeople believe that any Bank of Industry money owned by the government is part of the national pie. All we ask of you is to repay that money so we can give you another loan. “
“Nigeria’s Brand of Entrepreneurship Will Increase Poverty”
Meanwhile, Mr. Saibu said in his own presentation that the way Nigeria is pursuing its entrepreneurship program will only result in more people in the country living in poverty.
He said that a business owner is expected to identify a problem, critically examine the problem, and come up with a solution that is treatable and exchangeable with an overseas buyer.
âIf you’re making a product that no one can buy, that’s not the solution,â he said.
In his opinion, an entrepreneur does three things, including bringing a completely new product onto the market or making it easier for the buyer to access a product or providing access to that product.
âOur focus so far has been on creating platforms for people to have access to products, and that has created problems for our supply side. We are not creating entrepreneurs who make products, we are only creating entrepreneurs who make it easier to trade in a product made in other countries, âhe said.
He said creating platforms and apps that encourage people to buy overseas only add problems to Nigeria’s foreign exchange.
âThe startups can make billions of dollars, but they add to our country’s problem because the products and apps they develop promote businesses abroad.
âThey make it easier for people to shop in Amazon and China, but they haven’t made people shop in Nigeria. So we need to rethink that the entrepreneurs we want to produce will be people who make products that we can sell outside of Nigeria, âhe said.
Saibu also said the Central Bank of Nigeriaâs recently launched Tertiary Institution Entrepreneur Scheme (TIES) identifies agricultural enterprises, creative industries, and science and technology and says they are about software application development.
He said; âThe program is designed to help entrepreneurs and innovators, but it will only create demand access by having Nigerians create websites and apps that make it easier for people to shop abroad.
âThey are not looking for people to get into engineering, develop a prototype phone that is available to all Nigerians, and produce it locally so that people can buy phones made in Nigeria.
âYou are not looking for entrepreneurs who build vehicles that do not use electricity and solar but use our oil and can make it available. So until we begin to align our creativity, innovation and entrepreneurship with expanding the domestic economy, we may continue to have increasing entrepreneurship and rising unemployment at the same time. “
He went on to say that Nigeria needs to understand that it cannot teach entrepreneurs but can develop the talent in people to become entrepreneurs. âIt was not the training that produced Ronaldo, but the talent of a footballer that is in him. He was only given the opportunity to develop this potential. “
âWe have to promote IT and my opinion is that we should convert information technology into industrial technology. If we build our industry, we can be globally competitive, not in agriculture, âhe said.
“Africa cannot stay in the past”
For his part, Mr Adebisi said that Africa missed some development processes and said; âWe had the first, second and third revolutions but we didn’t do anything about it, we are still living in the first industrial revolution and the world will not wait for us so we missed it and this is the fourth industrial revolution. Because the world is not waiting for us, we have to be integrated into the world so that Africa does not lose everything in the end. “
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He said startups need to be encouraged to get into what is driving the fourth revolution. âWe have to be connected to the world and fintech is what we have to include. We have to combine the fourth revolution with what Professor Saibu said because if we lock down our economy we will lose everything. “
Mr Adebisi said local production is the best thing to do to boost the local economy, but criticized Nigeria’s poor electricity, saying; âWhen I produce here, nobody is buying at my production cost per unit. So if, as a Nigerian country, I bring my idea to China to turn it into a product, I know that I’ve exported jobs, but until I bring the products back to Nigeria, I’ll be contributing to GDP. “
“We have to start from there, whether we want to or not, because if we wait for the government to give us energy, we won’t do anything,” he said.
Opportunities for startups
For her part, Ms. Alonge said that there is a mismatch between opportunities and skills in Nigeria, noting that her organization is providing people with additional skills to help them increase their livelihoods.
She said the existing skill mismatch in the Nigerian labor market is a major contributor to the unemployment rate.
“This has to do with a lack of information about the needs of the labor market, but also with the discourse along with the need for a direction in which the labor market should go, which we talk about when we talk about industrialization, industrial development and others.” “
In her welcoming speech, the center’s director Taiwo Ipaye said the program was launched to bring both the city and the dress together to meet the needs of the labor market and provide the skills required for the colleges’ products.
Ms. Ipaye, a former university chancellor, said the center seeks to strike a balance between the city and dress for the country’s socio-economic prosperity.
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