Nigerian bank says non-performing loans to entrepreneurs almost 100%


The Bank of Industry said entrepreneurs across the country were not used to repaying loans, saying its portfolio of non-performing loans to entrepreneurs was between 80 and 100 percent.

The chief executive of the bank, Olukayode Pitan, revealed it recently during the first edition of the community engagement development workshop organized by the Arthur Mbanefo Digital Research Center (AMDRC) at the University of Lagos (UNILAG), Akoka.

The workshop, with the theme; “Building Nigeria’s Economy for the Immediate Future: The Role of Innovation, Entrepreneurship and the Creation of Startups,” presented academics and industry leaders, including the Director of the Institute China Development Studies University, Olufemi Saibu; Head of the Migration for Development Program at the German Agency for International Cooperation, Sarah Alonge, and Director of the Entrepreneurship and Skills Development Center at UNILAG, Sunday Adebisi, among others.

Lamentation of the BOI

Mr Pitan, in his presentation, listed some of the conditions under which it is difficult for Nigerian start-ups to access loans from the bank. He said that if the right steps are taken, start-ups can get loans of up to N10 million to expand their business initiatives.

“You can get the loans without putting your house as collateral. All we need are two guarantors and I can tell you that most Nigerians have problems getting two guarantors because they know them. We demand the BVNs from these guarantors and a few things, but they won’t give it because they know the people. So we say if the people who know you don’t 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 part of.

Mr. Pitan said; “We go to your state and tell the governor that any amount you give us, we’ll match it. We will lend the money in your state, but I can tell you the non-performing loan rate so far is on average 80-100%.

“People believe that all the money in the Bank of Industry that belongs to the government is part of the national cake. All we ask is that you repay that money so that we can give you another loan. “

“Nigeria’s entrepreneurship brand will lead to increased poverty”

Meanwhile, in his own presentation, Saibu said the way Nigeria pursues its entrepreneurship agenda will only increase the number of people living in poverty in the country.

He said an entrepreneur is supposed to identify a problem, take a critical look at the problem, and come up with a workable and tradeable solution with a buyer, but what Nigerian entrepreneurs do is just build apps that allow Nigerians to access products. abroad.

“If you create a product that no one can buy, that’s not a solution,” he said.

According to him, an entrepreneur does three things: offer a completely new product or facilitate access to the product for the buyer or create access to that product.

“Until now, our focus has been on creating platforms for people to access products, which has created problems for our sourcing. We don’t create entrepreneurs who create products, we only create entrepreneurs who facilitate the trade of a product made in other countries, ”he said.

He said that creating platforms and apps that entice people to buy from overseas only adds problems to Nigeria’s foreign exchange.

“Start-ups can make billions of dollars, but they make our nation’s problem worse because the products and applications they’ve created promote businesses overseas.

TEXEM

“They make it easier for people to buy in the Amazon and China, but they haven’t made people buy in Nigeria. Therefore, we need to rethink that the entrepreneurs we want to produce will be people who create products that we can sell outside of Nigeria, ”he said.

Mr Saibu also said that the recently introduced TIES (Tertiary Institution Entrepreneur Scheme) program by the Central Bank of Nigeria identifies agricultural enterprises, the creative industry and science and technology, claiming that they are all about the development of software applications.

He said; “The program is supposed to help entrepreneurs and innovators, but it will only create on-demand access, forcing Nigerians to build websites and apps that can make it easier to buy from overseas.

“They are not looking for people who can go into engineering, develop a prototype phone that is accessible to all Nigerians and produce locally for people to buy phones made in Nigeria.

“They’re not looking for contractors who can design vehicles that don’t use electricity and solar energy but our oil and be able to make it available. So, until we start to reorient our creativity, innovations and entrepreneurship towards the expansion of the national economy, we can continue to have growing entrepreneurship and at the same time increasing unemployment. “

Continuing, he said Nigeria must understand that it cannot teach entrepreneurs but develop the talent of people to become entrepreneurs. “It was not the training that produced Ronaldo but the talent of a footballer that is within him. He was only given the opportunity to develop that potential.

“We have to promote informatics and my own opinion is that we should change information technology to industrial technology. It’s when we build our industry that we can be competitive globally, not in agriculture, ”he said.

“Africa cannot stay in the past”

For his part, Mr. Adebisi said Africa has missed some development process, saying; “We had the first, second and third revolutions, but we didn’t do anything about it, we’re still living in the first industrial revolution and the world won’t wait for us so we missed it and this is the fourth. industrial revolution, so because the world is not going to wait for us, we must be integrated into the world so that in the end Africa does not lose everything.

READ ALSO : Large-cap bank stocks lead the pullback as Nigerian stocks lose N19.8 billion

He said start-ups should be encouraged to embark on the fourth revolution. “We have to be connected to the world and FinTech is what we have to tackle. We have to combine the Fourth Revolution with what Professor Saibu said, because if we lock down our economy, we will lose everything. “

Energy crisis

Mr. Adebisi said local generation is the best thing to boost the local economy, but denounced Nigeria’s poor electricity, saying; “If I produce here, no one will buy at my cost of production per unit. Therefore, if, as a Nigerian country, I bring my idea to China to turn it into a product, I know that I have exported jobs, but by the time I bring the product to Nigeria, I will contribute to the GDP .

“We have to go 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

For her part, Ms Alonge said there was a mismatch between opportunities and skills in Nigeria, noting that her organization provides additional skills to people to increase their livelihoods.

She said that the existing skills mismatch in the Nigerian labor market contributes significantly to the unemployment rate.

“It has to do with the lack of information on the needs of the labor market, but also the discourse as well as the need to know where the labor market is supposed to go, which we are talking about when we talk about industrialization, industrial development and others. . “

In her welcome address, center manager Taiwo Ipaye said the program was introduced to bring together both city and dress to meet the needs of the labor market and provide the skills required for the products. higher education institutions.

Ms Ipaye, the university’s former clerk, said the center is committed to creating common ground between the city and the gown for the country’s socio-economic prosperity.

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