Introduction – Reality Check
If you know me by now, you probably would have noticed that I have cautious excitement about Nigeria’s tech space. I have seen interesting, not so interesting and unimpressive business propositions. I believe that there are real problems to solve, but we are turning a blind eye to a lot of them.
And I know why! It is not exciting to solve hard problems. That’s why most startups want to enable online payment just for the few who are willing or able to pay online, rather than help that farmer in Taraba pay for fertilizers and receive payments from his offtakers.
This farmer does not use a smartphone; Smile, Swift and Spectranet do not find those locations viable. Also, the farmer does not have a bank account, let alone a debit card. He doesn’t understand OTP, but he has to participate in commerce in a certain way. That is a real (hard) problem to solve. You can’t solve that from Lagos and Abuja – not from your newly refurbished office in Yaba. These types of problems require grit!
There are a lot of such problems. How do you ensure that Alhaji Bashir takes health insurance for his immediate family? Or how do you open an online market for Mama Risi in Balogun market? These are really big problems to solve and they are not for small children.
I am not in any way saying that the challenges faced in making online payments have been fully solved; I am saying that there are other real problems to solve.
In selecting my startups, one major question I asked is, “What problem is the startup solving?” Is it a real problem or tech for tech’s sake? Is it a need-to-have or a nice-to-have (painkiller or multivitamin)? I need to know if it is a great idea on paper, but very tricky to implement. I will like to find out, whether the market is ready for the product or if the product is way ahead of its time.
Additionally, I will like to find out how large the potential target market is. And more importantly, do I believe that the team can execute in this market?
In no particular order, here are my startups to watch in 2018.
Farmcrowdy is an agritech platform that gives Nigerians the opportunity to participate in agriculture by selecting the kinds of farms they want to sponsor (fund). The sponsorship is then used to secure the land, engage the farmer, plant the seeds, insure the farm produce, complete the full farming cycle, sell the harvest and then pay the farm sponsor a previously agreed return on their sponsorship. While this farm process is ongoing, the farm sponsors are able to keep track of the full-cycle by getting updates through texts, pictures and videos.
Upon completion of the cycle, the farm produce is sold and everyone who participated in the process (the sponsor, the farmer and FarmCrowdy) gets paid.
Thrive Agric has a similar business model to Farm Crowdy. The major difference is that FarmCrowdy works with existing farmers, while Thrive Agric creates its own farm. Their job is to get into a community, negotiate land from the community and get locals to farm it on behalf of the sponsors.
Another reason I love Thrive Agric is that the founders were farmers first before technology came in. So they have unique insights into how farmers work and the challenges involved.
Thrive Agric is a recent graduate of the Ventures Platform 2nd Cohorts.
LifeBank is a platform that makes blood available when and where it is needed in Nigeria to save lives. They mobilise blood donations, take inventory of all blood available in the country, and deliver blood in the right condition to the points of need.
LifeBank seats in the medical supplies value chain. Through its App, it helps coordinate blood donation to blood banks and also helps hospitals in sourcing blood or other medical supplies. The technology and logistics company is based in Lagos, and incubated at Co-Creation Hub in Yaba. As at January 2017, the company has helped deliver over 2000 pints of blood to patients across the state.
The founder, Temie Giwa-Tubosun, has over 10 years of work experience in global health, and has worked as a Global Health Fellow at the United Nations Development Project Millennium Village in Ruhiira, Uganda; she has worked for the World Health Organization (WHO) and the Department for International Development (DFID) in Switzerland and Nigeria respectively, as well as in the Ministry of Works in the Lagos state government as an operations manager. I believe that she has the capacity to upscale the business in 2018.
Mines.io provides a credit scoring and loan application platform designed to provide access to formal credit. The company’s platform uses sophisticated algorithms to analyze multiple data sources and cost-effectively predicts default risk as well as offers an end-to-end platform to apply for loans through mobile, enabling both banked and un-banked consumers to receive instant loan approvals.
“Through mobile” – that, for me is the differentiator. Mines.io is able to analyse customers’ mobile behavior (banking history, and spending patterns) to determine credit worthiness, and you don’t have to download an App! This opens up over 100m Nigerians to their platform rather than being limited to only a few who use smartphones.
The team behind the business has also proven to be elite. Ekechi Nwokah has a Ph.D in computer engineering, Kunle Olukotun has a Ph.D in computer engineering from the University of Michigan, Arvind Sujeeth received his Ph.D. in electrical engineering from Stanford University and Abi Adeoti received his M.B.A. from Pepperdine University. The interesting thing about the team is that its members are not inexperienced; they understand the problem and are able to solve it using technology.
dot Learn uses proprietary video compression technology to deliver low-bandwidth online courses in Africa. This technology allows edtech businesses to provide video content for their students at much lower bandwidth costs without compromising the video quality.
The market size for this business transcends Nigeria. It includes all emerging and frontier markets where internet speed is slow or where users cannot afford to stream educational content because of the cost attached to video streaming.
I love the approach because dot Learn is not building a consumer product. Their target is simple – Coursera, Khan Academy, Udemy etc. All these companies want to drive engagement in emerging markets; however, internet is not readily available. Hence, they will require dot Learn to help “compress” the videos so that the consumers will be able to watch without recourse to data.
dot Learn will only earn from the video content providers.
The team behind the company is elite. Samrat Bhattacharyya has an MBA from Massachusetts Institute of Technology (MIT), while Tunde Alawode had his Ph.D from the same university. They have sufficient relationships to access the biggest providers of educational videos.
dot Learn was at the TechCrunch Battlefield Nairobi in 2017.
I believe these companies will make strong impressions this year. Watch out!
How to register for FG’s N75 billion MSME survival funds
FG released guidelines to access the N75 billion MSME Survival Fund.
The Federal Government (FG) has released the guidelines to access the N75 billion Micro, Small and Medium Enterprises (MSME) Survival Fund and Support Initiatives, which took effect from September 21, 2020.
The scheme, which is the core of the N2.3 trillion stimulus package of the Nigerian Economic Sustainability Plan includes the N60 billion MSMEs Survival Fund and the N15 billion Guaranteed Offtake Schemes.
This disclosure was made in an official statement by the Federal Government through a series of tweet posts on its official Twitter handle.
The statement from FG read, “As the portal for the registration of prospective beneficiaries of Survival Fund opens, interested Nigerians in the Payroll Support Scheme are to note that the site will be open from 10 pm Monday, September 21, 2020.”
The statement says that the registration for the payroll support will start with the educational institutions at 10 pm Monday, September 21, 2020, and will be followed by businesses in the hospitality industry by 12am Friday, September 25, 2020.
The portal will also open for other categories of small businesses from 12am, Monday, September 28, 2020. It should be noted that the scheduling of the registration for prospective beneficiaries is to ensure that the process is seamless and hitch-free. The registration of every sector is to continue until Thursday, October 15, 2020.
To register for this initiative, the Federal Government has also provided a portal for entry. Potential beneficiaries are advised to log on to https://survivalfund.ng to complete their registration.
As part of the registration process, the beneficiaries are expected to provide personal registration details, activate their account, register their organization after they have successfully activated their account.
Corporate Affairs Commission (CAC) Number, Bank Verification Number (BVN), SMEDAN Number, a Tax ID (optional) and the organization’s bank account details will be needed.
Completing the Payroll Support Registration, beneficiaries’ first name, last name, email, mobile number and Password will be required. Also, their Date of Birth, residential address and residential Local Government Area will also be provided.
These 2 MSMEs initiatives namely MSMEs Survival Fund with payroll support track and the Guaranteed Offtake Scheme were introduced by the FG as part of the efforts to support businesses overcome challenges posed by the Covid-19 pandemic.
The MSMEs Survival Fund scheme is a conditional grant to support vulnerable micro and small enterprises in meeting their payroll obligations and safeguard jobs in the MSMEs sector. The scheme is expected to save at least 1.3 million jobs across the country and specifically impact on over 35,000 individuals per state.
The scheme will be implemented over an initial period of 3 months and is targeted at employees of MSMEs and self-employed individuals with 45% for female business participation and 5% for special needs participation
The Guaranteed Off Take Stimulus Scheme is expected to perfect and sustain the income of vulnerable micro and small enterprises from the economic disruptions of the Covid-19 pandemic through the implementation of various initiatives aimed at boosting the production capacities of small businesses as well as the provision of grants.
The duration is also for an initial period of 3 months and is targeted at micro and small businesses registered in Nigeria.
Registration for #PayrollSupport will start with educational institutions at 10pm on Monday Sept 21, 2020, and will be followed by businesses in the hospitality industry on Friday September 25 beginning from 12am.
— Government of Nigeria (@NigeriaGov) September 21, 2020
FG to provide financial support for 1.7 million businesses, individuals in next 3 months
FG had announced specific programmes aimed at cushioning the impact of COVID-19 on MSME businesses.
The Federal Government has announced plans to provide financial support for 1.7 million businesses and individuals across the country within the next 3 months.
This disclosure was made by the Minister of State for industry, Trade and Investment, Ambassador Mariam Katagum, at the virtual commissioning of the Fashion Cluster Shared Facility for Micro, Small, and Medium Enterprises (MSMEs) tagged, Eko Fashion Hub, in Lagos.
Katagum disclosed that the initiative is borne out of the Federal Government’s continued commitment to helping cushion the devastating impact of the coronavirus pandemic on the economy by saving existing jobs and creating new job opportunities.
The minister said that President Muhammadu Buhari’s administration, through the Economic Sustainability Committee, had announced specific programmes aimed at cushioning the impact of COVID-19 on MSME businesses.
She said, “The Federal Government is fully committed to empowering Nigerians; more so in the face of the COVID-19 Pandemic. In this regard, the government, through the Economic Sustainability Committee had announced specific programmes aimed at cushioning the impact of COVID-19 on MSME businesses.
“These programmes include among others, the N75 billion MSME Survival Fund and Guaranteed Off-take Schemes of which I have the honour to chair the Steering Committee for the effective implementation of the projects.
“The project, which will run for an initial period of three months, is targeting 1.7million entities and individuals and has provisions for 45 per cent female-owned businesses and five per cent for those with special needs. The registration portal for the schemes is set to open on Monday 21st September 2020 and I urge you all to take full advantage of the schemes.’’
The Nigerian Economic Sustainability Plan which was produced by a committee headed by the Vice President, Yemi Osinbajo, is a response to the health and economic challenges which foisted on the country by the outbreak of the novel coronavirus pandemic.
Aside from developing robust monetary policies and fiscal measures to enhance oil and non-oil government revenues and reduce non-essential spending, the plan also includes a N2.3 trillion stimulus package for the economy.
Katagum said that the schemes were at the core of the N2.3 trillion stimulus package being implemented by the Federal Government. She said that the commissioning of shared facilities was also expected to provide succour and relief to the teeming micro-businesses in need of space and infrastructural support
NSE, IFC promote participation of women-owned and run SMEs under the Nigeria2Equal programme
The NSE and IFC hosted the webinar to review support for women-owned businesses.
As the COVID-19 pandemic continues to disrupt economic activities all over the world, the informal sector (specifically small and medium enterprises, SMEs), have been at the centre of the crisis.
In view of the strong representation of female entrepreneurs within the SMEs space, The Nigerian Stock Exchange (NSE) hosted a webinar in collaboration with the International Finance Corporation to address the theme, Supporting SMEs and Women-Owned Businesses in Corporate Value Chains.
Speaking at the webinar, the Divisional Head, Shared Services, NSE, Bola Adeeko noted, “Entrepreneurs in Nigeria face significant challenges in accessing finance to sustain or expand their businesses. With the high level of female participation in entrepreneurship (OECD in 2019 puts female participation at 58% compared to male’s 45% male), experts anticipate that the COVID-19 crisis will hinder the progress made in advancing women’s entrepreneurship in Nigeria.
“To this end, we are pleased to have brought together an expert panel of discussants who have made an indisputable business case for gender-inclusive practices in corporate value chains and highlighted strategies for improving the participation of women owned and run SMEs.”
Looking at the current SMEs landscape, the Executive Director, Fate Foundation, Adenike Adeyemi indicated that, “When we look at the micro segment, we see that the number of women-owned businesses is equal to men-owned businesses.
“However, as we move on to the SMEs segment, we see a drop in female participation to less than 25% which suggests that women are either dropping off or not growing as quickly as their male counterparts.”
In identifying some of the constraints female entrepreneurs face, Nigeria Country Director, WeConnect International, Yeshua Russel said, “While it is imperative that concerted efforts are made to link women to the value chains of large corporations in order to empower them, there are barriers that must be addressed which include inadequate technical capacity; low level of collaboration among women-owned businesses; and lack of access to finance.
“Consequently, we need to create more structures and systems that can educate and incorporate women to raise their level and quality of participation.”
The Director, Corporate Affairs and Sustainable Business, Ghana and Nigeria, Unilever, Soromidayo George further expounded on this saying, “From our experience with Ebola and other epidemics, the economic impacts of a health crisis will have a disproportionate impact on women which will widen the gender inequality gap.
“This is particularly attributable to the harmful social norms that limit the expectations of what women can and should do especially along familial and business spectrums. We must, therefore, articulate organised ways to tackle these expectations and lay the right building blocks to achieve gender equality.”
All the panelists during the session agreed on the fundamental needs of businesses, particularly women-owned businesses as articulated by Executive Director, Business Banking, Access Bank, Ayodele Olojede.
She noted that, “In building and nurturing women-owned businesses, it is important to adopt a holistic approach that focuses on the four fundamentals of finance, information, market and technology.”
Taking this a step further, the Director, Enterprise Development Centre, Lagos Business School. Peter Bankole emphasized, “Capacity building must go beyond training in the development of women-owned businesses. Women are fast and adaptive learners but must also be given the support of mentoring and hand-holding to reach their highest potential.”
In closing out the event, the Head, Corporate Communications, NSE, Olumide Orojimi emphasised the need to continue the conversation beyond the webinar.
He said, “Bridging the gender inequality gap is a journey and it is one we must all contribute to actively. We at the NSE are proud of our efforts at advancing female participation within our operations and our ecosystem and our collaboration with IFC is one of the efforts we are truly proud of.”
It would be recalled that The Nigeria2Equal initiative was kicked-off in May with a webinar that explored the gender implications of COVID-19 for women as employees.
The conversations that ensued during that webinar highlighted the differential socioeconomic impacts of the COVID-19 pandemic on men and women, with women predicted to face more negative impacts.