Investment Tips
How to get the BOI loan for ‘Youth Corpers’
- The loan facility is targeted at fresh graduates/serving corps members.
- One can access a loan of up to N2million with 0% interest rate for any bankable business plan.
- Tenor of the loan is between 3-5years.
Statistics from the National Bureau of Statistics (NBS) show that unemployment rate increased to 18.8% in the third quarter of 2017 from 16.2% in the second quarter of 2017.
Unemployment rate in Nigeria averaged 10.63% from 2006 until 2017 – it reached an all-time high of 19.7% in the fourth quarter of 2009 and a record low of 5.1% in the fourth quarter of 2010.
This alarming statistics further reinforces the need to promote entrepreneurial skills among young graduates. Instead of searching for white collar jobs which are not available, they can be job creators and entrepreneurs.
Why the loan facility is important
The Bank of Industry (BOI) in fulfilling its mandate of providing financial assistance for the establishment of large, medium and small projects, as well as their expansion, came up with a loan scheme for young graduates and serving corps member with profitable business ideas.
The Graduate Entrepreneurship Fund (GEF) scheme was launched in October, 2015 and implemented by the bank in partnership with the National Youth Service Corps (NYSC) directorate. The initiative is specifically targeted at youths undergoing the mandatory 1 year national service program.
The Graduate Entrepreneurship Fund Program was birthed to address the worrisome phenomenon of unemployment and youth restiveness in the country and also change the mindsets of Nigerian youths to self-reliance by encouraging them to develop skills for self-employment and contribute to the growth of the economy.
How applicants are selected
The loan facility is available to serving NYSC members that have successfully passed through the following stages:
- Screening process to ascertain their suitability for the loan.
- Attend the capacity building program developed specifically for the prospects under GEF.
- Submit a bankable business plan in respect of any of the bank’s identified 40 SME clusters. The clusters are listed on the bank’s website; applicants must have a detailed business plan showing details of cash-flow and expected returns.
How to start the process
Applicants must participate in the online business plan competition (which is available on the bank’s website) where the most promising business ideas are selected from the list.
A 3-day intensive entrepreneurship capacity building program is organized by the bank to equip successful applicants with skills and increase their capacities. Location for the training is spread across the 6 geo-political zones of the country.
At the end of the program, successful applicants with lucrative business ideas will be provided with a loan facility of N2million with tenors ranging from 3-5 years inclusive of 6-12 months moratorium period.
Documents applicants must present
- Undertaking by the NYSC directorate not to release the discharge certificate until the loan is liquidated.
- 1 external guarantor acceptable to BOI who must belong to any of the following categories:
I. Senior Civil Servants (level 7 and above).
II. Bankers (not below the level of banking officer) who must have been confirmed by current employers
III. Professionals: medical doctors, lawyers, accountants, engineers, etc.
IV. Senior staff of reputable quoted companies or international oil companies.
V. Clergymen.
The guarantees must be supported with a notarized statement of net worth acceptable to BOI.
Are you a young graduate who is currently participating in the NYSC Scheme, with business ideas and a strong passion to become an entrepreneur?
You should give this loan facility a shot this year.
Exclusives
In a hyperinflation economy like Nigeria’s, these are the best investments to consider immediately
A deeper review of investments to consider amid the prevailing high inflation in Nigeria.
Let’s face it, Nigeria’s rising inflation plus lower options for high yielding investments are already driving a significant number of investors away from Africa’s leading frontier market. This is coming at a time when Nigeria’s top performing investment asset class for 2020 is currently having a year-to-date return of around -3.30%.
Recent data published by the National Bureau of Statistics (NBS) reveals Nigerian inflation rate surged to a 33-month high, as it rose further to 16.47% in January 2021 from 15.75% in December 2020. This is marks 17th consecutive month of rising inflation in the country.
Consequently, Nairametrics interviewed selected financial experts on the investment options best suitable for such macro.
That being said, it’s important to note that there are no guarantees when it comes to investing during high inflation. At best, such investments may be inflation-safe, but returns can never be guaranteed.
READ: The Nigerian economy is increasingly dollarized but there is a way-out
Debo Adejana, MD/CEO, Realty Point Limited, Chairman, REDAN South West Zone.
At 16.5% inflation rate as of January 2021, the obvious is that there are very little short-term investments that can outperform that especially in the short term. So, that being said, my traditional conservative disposition of the fact that the best investment term is the long-term.
To make returns that will consistently be higher than 16.5% in short term investments will require very good knowledge of the asset class and share dedication.
If that is clear, then by my own understanding, the following are some of the possible investment areas or strategies to adopt with real estate being my most preferred asset class anytime:
- Financial player in a JV Property Development Scheme. This helps to save time and gives faster turnover of investment fund.
- Buying distressed property now, renovate, rent-out for 2years of more just to hold if necessary and sell after.
- Crowd owning/funding property deals
- Guaranteed rent discounting
- International property investment for positive cash flow and to enjoy foreign exchange appreciation
All the above can be done as a large ticket investor or little fractional holder using a well-structured and regulated vehicle.
READ: Real estate sector GDP positive in Q4 2020, but still in the woods
Darlington-Morsi Onyemaka, Co-founder, Quba Exchange
Inflation means that prices for things are rising, and as such the same amount of money buys less over a certain period of time. This in itself is especially not good for cash savings as the best way to manage inflation is by investing in instruments that give you a return higher than the current rate of inflation or at least one that keeps up with it.
The best kinds of assets to invest in during inflation are tangible assets that have fundamental values and as such, their worth measures up together with inflation. These assets include real estate, growth stocks, and commodities like food, crude oil, and gold (especially gold).
On the flip side, one should avoid long-term fixed-income investments. This is because the value of the underlying security falls as investors tend to focus on higher-yielding alternatives when the interest rates of that instrument start rising.
READ: FG says Finance Bill 2020 will check inflation
Thelma Ugonna Ohiri-Anyanwu, CFA
Inflation is the increase in prices of goods over a period of time, where a specific amount of currency will be able to buy less than before.
In as much as inflation erodes the value of funds, this should not deter one from investing as some investment’s types are great hedge against inflation and helps to preserve capital. Some of such investments are Gold, REITs, real estate, commodities and a well-balanced stock portfolio.
Silas OZOYA, Founder/CEO SUBA Capital
Inflation in many ways affect the general health of a countries economy and her citizens literally and the only way out of inflation is continuous and increased investments in local production, expansion of existing local businesses and enacting fiscal policies that would strengthen the currency of such country.
To mitigate this, increased and persistent investment from all angles in Agriculture, local processing, and increased export would do a positive dent on our inflation rate and keep us far away from recession through job creation, wealth growth, food, and cash crop production at scale.
Nigerian’s home and abroad should consider investments that support economic growth through investments in Agriculture and agro-allied ventures.
Agriculture from my experience is one of the very few sectors that puts food on the table, employs people, and grows the value of your money against inflation all in one value chain.
The general public, high net worth individuals, and Nigerians abroad should consider holding at least 20% of their asset portfolio in Agriculture and agro-allied investments.
Angela Aya, Head, Institutional Sales at Alonati
There are a lot of investment opportunities for both the wealthy and not so rich investors in Nigeria, investors desiring to get an income or return on investment. Some are the FGN Savings Bonds, Stocks, Real Estate, Gold, Cryptocurrency, Agriculture etc. However, below are some investments that offer inflation protection:
Real Estate
Investment in real estate has been profitable and remains lucrative especially in Nigerian urban cities.
This investment however requires medium to high capital. Nigeria is still a developing Country in the world and the need for housing to match the Country’s increasing population size remains critical, as urban-rural migration continues to increase due to the neglect of development of the rural areas by the States and Federal Government.
The value of land and property has continued to rise and will continue to appreciate due to the margin between demand and supply as the need for residential and commercial buildings in major cities remains high.
Gold
Investing in gold has remained an agelong golden income space. The value of gold has continued to appreciate over the years because of the importance attached to it all around the world.
Gold remains an important symbol of wealth and affluence, and can be purchased as bars, coins or jewelries and resold at a higher price over time.
Bottom line
A disciplined investor can hedge against inflation risks by investing in the following asset classes that often outperform during high inflationary climates.
- Debo Adejina – Real Estate,
- Darlington-Morsi Onyemaka – real estate, growth stocks, and commodities like food, crude oil, and gold (especially gold).
- Thelma Ugonna Ohiri-Anyanwu, CFA – Gold, REITs, real estate, commodities and a well-balanced stock portfolio.
- Silas OZOYA – Agriculture and agro-allied ventures.
- Angela Aya – Real Estate & Gold.
Investment Tips
Retail franchise investment next gold mine for Nigerian investors- CIG
Retail franchise investment curbs unemployment and create buffer for people looking for side hustle
The Choice International Group (CIG) has tasked both unemployed and employed Nigerians to embrace retail franchise investment, as the initiative would curb unemployment in the nation and create buffer for people looking for side hustle.
In line with a recent FBDS Study, there are over 450,000 Nigerian career professionals with minimum investible funds of N1 million, looking out for investment opportunities.
In the majority, these funds are looking for franchise type opportunities for ease of venturing and minimal failure risk.
As far as CIG chairperson, Diana Chen, is concerned, such investor should look no further but consider the group’s retail franchise investment opportunity, which offers Nigerian community mouth-watering offer of owning Gree & Lontor retail stores.
According to him, Gree is the world’s residential air-conditioner manufacturer, while Lontor provides high-quality, energy-saving and convenient rechargeable home appliances and lighting products for global consumers.
He said, “Both brands have been built by the CIG into a world-class electronic retail chain in Nigeria opening no less than 20 brand shops in Lagos and Oyo over the last 18 months.
“The sales performance of its existing stores in the country makes Gree & Lontor one of the most profitable businesses in Nigeria with yields of an average return on investment of 50% and above per annum.
“CIG is offering investors the opportunity to own any of six regional logistics centres, or any number of Gree & Lontor brand shops in viable locations across Nigeria.
“It is the decision of the company to open up these opportunities to the investing public through a Franchise Retail partnership.”
He added that the company has mapped out two investment models it says are simple, transparent, and hassle-free.
“The first model involves only six regional logistics centres located across the geopolitical zones in Nigeria.
“Whoever invests in this will require a capital outlay of $1 million, and become a mega distributor partner of the Gree & Lontor brand, and service a network of brand shops.
“The second investment model involves the Gree & Lontor brand shops – retail franchise stores that require an initial capital outlay of N20 million.
“The investor will secure a store size of 120-150sqm at any choice location, shopping mall, plazas, high streets and even residential neighbourhoods.”
What they are saying
Nigeria is a growth market for franchising and franchise development services.
Gbenga Ajayi, an Entrepreneurship analyst, said, “The retail industry comes second to the food industry among sectors with best franchising opportunities.
“As with other emerging markets, one of the challenges of franchising in Nigeria remains the strengthening of intellectual-property regimes so that franchise companies can transmit knowledge and franchise system concepts with the confidence that such know-how will be protected.
