NIGERIA NIGERIA SME’S & Diaspora Engagement SME’S & Diaspora Engagement Opportunities & Challenges Opportunities & Challenges NIGERIA SME’s – the economic growth engine 1
Apr 01, 2015
NIGERIA NIGERIA SME’S & Diaspora SME’S & Diaspora
Engagement Opportunities & Engagement Opportunities & ChallengesChallenges
NIGERIA
SME’s – the economic growth engine
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Presentation by Presentation by
Clive CarpenterClive Carpenter
Vice Chairman and Nigeria Desk Vice Chairman and Nigeria Desk OfficerOfficer
Business Council for Africa West & Business Council for Africa West & SouthernSouthern
March, 2014March, 2014 2
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NIGERIA’s SME’s
Vast potential but SME’s not loved by the
banks!
SME CHARACTERISTICSSME CHARACTERISTICS SME’s across the globe fail to get the attention SME’s across the globe fail to get the attention
they they
deservedeserve SME’s are the growth engine of any economy – SME’s are the growth engine of any economy –
creating a multiplier effectcreating a multiplier effect Today’s SME may be tomorrow’s Nestle, Today’s SME may be tomorrow’s Nestle,
Dangote, Diageo or Shell perhapsDangote, Diageo or Shell perhaps SME’s outnumber large established businesses SME’s outnumber large established businesses
by a huge marginby a huge margin SME’s collectively employ more people than SME’s collectively employ more people than
large established companieslarge established companies SME’s are often responsible for driving SME’s are often responsible for driving
innovation and competition in many economic innovation and competition in many economic sectorssectors
SME’s need intensive care and nurturing to SME’s need intensive care and nurturing to take-off on the path to growth and prosperitytake-off on the path to growth and prosperity 4
SME CHALLENGESSME CHALLENGES Ability to raise finance Ability to raise finance Ability to present financial application in a form Ability to present financial application in a form
acceptable to a lender – i.e. Business Plan, Cash acceptable to a lender – i.e. Business Plan, Cash Flow Projections, P&L Forecasts, Budgets, etc.Flow Projections, P&L Forecasts, Budgets, etc.
SME promoters are usually entrepreneurs – SME promoters are usually entrepreneurs – resourceful people with ideas, willing to take resourceful people with ideas, willing to take risks, but often poor at translating ideas into clear risks, but often poor at translating ideas into clear documentary supportdocumentary support
SME’s are not very profitable for banks and SME’s are not very profitable for banks and financiers in general, especially in the short-termfinanciers in general, especially in the short-term
SME’s require medium to long-term financeSME’s require medium to long-term finance SME’s often need a long moratorium on the SME’s often need a long moratorium on the
repayment of credit facilitiesrepayment of credit facilities Borrowing from banks is often not the best Borrowing from banks is often not the best
method for SME’s to raise financemethod for SME’s to raise finance Many bank staff are not specifically trained in Many bank staff are not specifically trained in
SME financeSME finance 5
THE ROLE OF THE DIASPORATHE ROLE OF THE DIASPORA
An understanding of how SME’S have made An understanding of how SME’S have made progress in countries other than Nigeriaprogress in countries other than Nigeria
Can act as mentors to assist with the drafting of Can act as mentors to assist with the drafting of Business Plans, Budgets, Cash Flow Forecasts, Business Plans, Budgets, Cash Flow Forecasts, etc. etc.
May be willing to provide seed capitalMay be willing to provide seed capital Each year, Diaspora remits USA$45 billion back Each year, Diaspora remits USA$45 billion back
to Africato Africa Plays a key role in African developmentPlays a key role in African development Diaspora drives the transfer of intellectual Diaspora drives the transfer of intellectual
resource and creative business practices to Africaresource and creative business practices to Africa Diaspora has unique knowledge of business Diaspora has unique knowledge of business
environment on the Continentenvironment on the Continent Diaspora best equipped to change international Diaspora best equipped to change international
community’s perception of Africacommunity’s perception of Africa6
SOME OPPORTUNITIES FOR SOME OPPORTUNITIES FOR SME’SSME’S
Initiatives by some larger corporates to assist Initiatives by some larger corporates to assist SME’sSME’s• Ernst & Young – free consultancy service in some Ernst & Young – free consultancy service in some
emerging marketsemerging markets• Regcharles Finance & Capital Ltd., LagosRegcharles Finance & Capital Ltd., Lagos• AIA’s African Diaspora Fund – invests in SME’sAIA’s African Diaspora Fund – invests in SME’s• Jacana Partners – invests in SME’sJacana Partners – invests in SME’s• Nigerian banks more SME focused than Nigerian banks more SME focused than
previouslypreviously• SMEDANSMEDAN• Bank of IndustryBank of Industry• Crowdfunding – Funding CircleCrowdfunding – Funding Circle• Invoice financingInvoice financing• Venture Capital TrustsVenture Capital Trusts• Private equity generally better than debt for Private equity generally better than debt for
SME’sSME’s 7
Business Council for Business Council for AfricaAfricaWest & SouthernWest & Southern
To encourage business in Africa for the benefit of members and the sustainable economic development of the countries of Africa
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Membership•Multi-Nationals - Shell, Diageo, PZ Multi-Nationals - Shell, Diageo, PZ Cussons, BATCussons, BAT•SMEs SMEs •Consultants Consultants •NGO’sNGO’s•All sectorsAll sectors•Over 400 companies and Over 400 companies and entrepreneursentrepreneurs•Linked to the Eastern Africa Linked to the Eastern Africa AssociationAssociation•Linked to EBCAMLinked to EBCAM
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Membership BenefitsMembership Benefits
• Networking – investor briefings & Networking – investor briefings & networking networking • lunches - FCO, UKTI & DFIDlunches - FCO, UKTI & DFID• Influence and Lobbying – Influence and Lobbying – ECOWAS, NEPAD, SADC and at ECOWAS, NEPAD, SADC and at Ambassadorial Ambassadorial and Ministerial leveland Ministerial level• Discount Opportunities – hotels, Discount Opportunities – hotels, airlines, clubsairlines, clubs• Business Intelligence InformationBusiness Intelligence Information• Access to African and European Access to African and European NetworkNetwork
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ConclusionConclusion
Network with SME’s that have made itNetwork with SME’s that have made it NIDO, CANUK, BCA and others have NIDO, CANUK, BCA and others have
networks that can assist younetworks that can assist you Corruption is a choice, not a necessityCorruption is a choice, not a necessity Remember the risk / reward equation – Remember the risk / reward equation –
the greater the risks and challenges, the the greater the risks and challenges, the greater the rewardgreater the reward
No pain – no gain!No pain – no gain! Today’s SME is tomorrow’s DangoteToday’s SME is tomorrow’s Dangote Its who you know more than what you Its who you know more than what you
knowknow Develop a wide network of contactsDevelop a wide network of contacts If you are not known how can you be If you are not known how can you be
helped?helped?11
A partner in development across A partner in development across AfricaAfrica
Join our network – grow your businessJoin our network – grow your business
www.bcafrica.co.ukwww.bcafrica.co.uk12
If you’re not in Nigeria, you’re not in Africa !
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