The Bank of Industry has said the country’s entrepreneurs don’t have the habit of repaying loans, saying its non-performing loan portfolio awarded to entrepreneurs ranges between 80 and 100 per cent.
The bank’s managing director, Olukayode Pitan, disclosed this recently at the first edition of the community engagement development workshop organised by the Arthur Mbanefo Digital Research Centre (AMDRC) of the University of Lagos (UNILAG), Akoka.
The workshop, with the theme; “Building the Nigeria’s Economy for the Immediate Future: The Role of Innovation and Entrepreneurship and Startups Creation,” featured scholars and industry leaders including the director of the university’s Institute of China Development Studies, Olufemi Saibu; head of programme- migration for development at the German Agency for International Cooperation, Sarah Alonge, and the director, entrepreneurship and skills development centre at UNILAG, Sunday Adebisi, among others.
Mr Pitan, in his presentation, listed some of the conditions it is difficult for Nigerian start-ups to access loans from the bank. He said if proper steps are taken start-ups can get loans of up to N10m to expand their business initiatives.
“You can get the loans without bringing your house as security. All we require are two guarantors and I can tell you, most Nigerians have problems getting two guarantors because they know them. We require the BVNs of those guarantors and a few things but they will not give it because they know the people. So we are saying if people that know you do not want to guarantee you, why should we believe in you?” he said.
He said another thing the bank tried was the introduction of matching grants which he noted that about 20 states are a part of.
Mr Pitan said; “We go to your state and tell the governor that any amount you give us, we will match it. We will lend the money in your state but I can tell you that the non-performing loan ratio so far is on the average between 80-100 per cent.
“People believe that any money from the Bank of Industry that is owned by the government is part of the national cake. All we ask of you is pay back that money so that we can give you another loan.”
‘Nigeria’s brand of entrepreneurship will lead to increased poverty’
Meanwhile, in his own presentation, Mr Saibu said the way Nigeria is pursuing its entrepreneurship programme will only lead to an increased number of people living in poverty in the country.
He said an entrepreneur is expected to identify a problem, look critically at the problem, and come up with a solution that is treatable and can be exchanged with a buyer but that what Nigerian entrepreneurs are doing was merely to create applications for Nigerians to access products overseas.
“If you create a product that nobody can buy, that is not a solution,” he said.
According to him, an entrepreneur does three things including bringing up a completely new product or facilitating product getting to the buyer or creating access to that product.
“Our focus so far has been creating platforms for people to have access to products and that has been creating problems for our supply side. We are not creating entrepreneurs who are creating products, we only create entrepreneurs who facilitate the trading of a product produced in other countries,” he said.
He said creating platforms and apps that make people buy oversea only adds problems to Nigeria’s foreign exchange.
“The start-ups may earn billions of dollars but they are adding to the problem of our country because the products and apps they created are promoting businesses overseas.
“They make it easier for people to buy in Amazon and China but they have not made people buy from Nigeria. Therefore, we need to have a rethink that the entrepreneurs that we want to produce will be people who create products that we can sell outside Nigeria,” he said.
Mr Saibu also said the recently introduced Central Bank of Nigeria’s Tertiary Institution Entrepreneur Scheme (TIES) identifies agricultural businesses, creative industry and science and technology, saying they are all about software application development.
He said; “The scheme is supposed to assist entrepreneurs and innovators but it will only create demand access, making Nigerians build websites and apps that can make it easy for people to buy overseas.
“They are not looking for people who can go into engineering, develop a prototype of a phone that can be accessible to all Nigerians and produce locally for people to buy Nigeria-made phones.
“They are not looking at entrepreneurs who can design vehicles that are not using electricity and solar but our oil and be able to make it available. So, until we begin to redirect our creativity, innovations and entrepreneurship towards expanding the domestic economy, we may continue to have increasing entrepreneurship and at the same time increasing unemployment.”
Continuing, he said Nigeria needs to understand that it cannot teach entrepreneurs but develop the talent in people that they become entrepreneurs. “It is not the training that produced Ronaldo but the talent of a footballer that is in him. He was only given the opportunity to develop that potential.”
“We need to promote IT and my own take is that we should change information technology to industrial technology. It is when we build our industry that we can compete globally, not agriculture,” he said.
‘Africa cannot stay in the past’
On his part, Mr Adebisi said that Africa has missed some developmental processes, saying; “We had the first, second and third revolutions, but we did not do anything about it, we are still living in the first industrial revolution and the world will not wait for us so we have missed it and this is the fourth industrial revolution, so because the world is not going to wait for us, we have to be integrated into the world so that at the end of the day Africa will not lose it all.”
He said start ups have to be encouraged to go into what drives the fourth revolution. “We must be connected to the world and Fintech is what we must key into. We need to combine the fourth revolution with what professor Saibu said because if we lock down our economy we will lose it all.”
Mr Adebisi said local production is the best thing to boost local economy but he decried Nigeria’s poor electricity, saying; “If I produce here, nobody will buy at my cost of production per unit, therefore, if as a Nigerian country I take my idea to china to create it into product, I know that I have exported jobs but by the time I bring the products back to Nigeria, I will contribute to the GDP.”
“We need to start from there whether we like it or not because if we wait for the government to give us energy, we will not do anything,” he said.
Opportunities for start-ups
On her part, Ms Alonge said there is a mismatch of opportunities and skills in Nigeria, noting that her organisation provides additional skills for people to increase their livelihood.
She said the existing skill mismatch within the Nigerian labour market contributes significantly to the unemployment rate.
“This has to do with lack of information on the labour market’s needs but also the discourse together with the need for direction of where the labour market is supposed to go which is what we are talking about when we talk about industrialisation, industrial development and others.”
In her welcome remark, the director of the centre, Taiwo Ipaye, said the programme was introduced to bring both the town and gown together to address the needs of the labour market and provide the required skills for the tertiary institutions’ products.
Mrs Ipaye, a former registrar of the university, said the centre is committed to creating a middle ground between the town and the gown for the socio-economic prosperity of the country.
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