FATE Institute The FATE Foundation recently launched the State of Entrepreneurship in Nigeria 2022 report at the 8th annual policy dialogue series of the FATE Institute on Entrepreneurship held on Thursday, November 17, 2022.
This year, the State of Doing Business in Nigeria report was launched along with the second report on “Eliminating Access to Finance for Nigerian Entrepreneurs”. Both reports were produced by the FATE Institute, the research, policy and advocacy arm of the FATE Foundation, which fosters innovative thinking and creates platforms to share ideas and strategies to address challenges around entrepreneurship in Nigeria.
The Chairman of FATE Foundation, Mr. Fola Adeola, in his speech opened the reports at the Policy Dialogue, saying:
The State of Doing Business in Nigeria Report provides an assessment of the business landscape in Nigeria using five key indicators: Business Performance, Skills Acquisition, Innovation and Technology, Opportunity Perception and Business Environment. The report, Restoring Access to Finance for Nigerian Entrepreneurs It takes an in-depth approach to understanding the access to finance problem in Nigeria and making recommendations on the way forward. Both reports aim to provide insights and data recommendations to guide government and ecosystem players on policy and program design/implementation to improve outcomes in terms of access to finance. Funds have been developed.
Key data from the State of Doing Business in Nigeria 2022 report includes: 8,611 businesses in 36 states in Nigeria, including the FCT; more than half of the surveyed entrepreneurs (51%) are aged 30-39; 61% of male-led businesses and 39% of women-led businesses; 80% of surveyed businesses were either nano (41%) or small businesses (39%); half of the surveyed enterprises (50%) are 5 years old or less; This is the second time that the perception of opportunities is the highest and the enabling environment has been ranked the lowest according to the entrepreneurship index; Imo state is ranked highest with 0.82 points, Bauchi with 0.72, Delta with 0.70, Gombe and Plateau both with 0.69. Kogi and Taraba states and the FCT ranked lowest overall with an index of less than 0.40. The full report can be downloaded here – http://www.fatefoundation.org/2022soe/
Key takeaways from the report, Bridging the Access to Finance Gap for Nigerian Entrepreneurs, include: personal savings cited by 74% of entrepreneurs as the main source of funding, followed by family and friends (37%); by institutional sources, cooperatives 41% and microfinance banks 27%; only 19% of entrepreneurs received funds from commercial banks; Commercial bank lending to the private sector was ₦22 trillion in 2018, but only 0.38% of that credit went to small businesses.
Demand-side challenges include high cost of credit; low level of confidence; limited awareness of enablers such as chattel registers. Supply-side problems include limited financial literacy and investment readiness; poor understanding of loan eligibility information and learning from previous financing programs. Policy recommendations to address the gap include better mapping and sizing of the NMSME segment for financing; expanding coverage of credit reports; and the use of technology for digital identity in creditworthiness. The full report can be downloaded here – http://www.fatefoundation.org/accesstofinance/
Also at the launch of the reports, the Executive Director of FATE Foundation, Adenike Adeyemi, said, “There is a need for a targeted approach to address access to financial gaps, use technology to leverage funds, improve the digital footprint of entrepreneurs and assess the impact of current funding programs.”
FATE Foundation is Nigeria’s foremost non-profit that provides entrepreneurial knowledge and enterprise to enable Nigerians to start, grow and expand sustainable businesses. FATE Foundation was established in 2000 by Mr. Fola Adeola, Founder and Pioneer Managing Director of Guaranty Trust Bank with the objective of promoting wealth creation through business promotion and entrepreneurship development among Nigerians.