Etop Ikpe is the Chief Executive Officer of Cars45, one of Africa’s largest digital automotive trading platform. Cars45 is a technology platform that drives the automobile industry across Africa. Before Ikpe founded it in 2016, he served as CEO at Dealdey.com and as Commercial Director at Konga.com, one of Nigeria’s largest e-commerce platforms.
In this interview with Nairametrics, Ikpe shares the growth story of Cars45, the industry’s black market, the challenges faced when operating in Nigeria, and discussed the issue with the ‘Made-in-Nigeria campaign’, amongst many more issues.
Cars45 raised funds in 2017, are there plans to raise more cash for the operation?
We have seen a huge market potential and we are at a very early stage in our growth and development as a business. There are major growth cycles that we would always achieve and most of those cycles require that we infuse some level of additional investment to the business. It’s a natural process to grow, and meet bourgeoning market demand, and during those growth curves, you’ll need more investment.
What have been the challenges of operating in Nigeria?
Our values of providing solutions to customers’ problems will never go out of fashion. As a market maker, it takes time for people to understand what your value propositions are. So, there might be initial skepticism and resistance from the market because people fear what they don’t know. We have done a lot of engagement with the authorities and one consistent thing is that as we unravel and move forward, the goal becomes clearer. The biggest challenge has always been staying true to our values beyond the criticism that we receive and maintain our discipline.
It is also to remember that the market is very fragmented and so there is very little structure around the market. So as you develop, the ecosystem that is needed to support the business might not necessarily be there. It simply means we have to build a lot of partnerships and relationships with a lot of other parties.
To be honest, not everybody is ready to move in the direction we are proposing; some people are comfortable just operating small, but I think it’s a gradual process. If you are innovating around something, then part of the skillset that you need is patience and you need to develop a market over time.
How do competitors affect the business decisions and operation of Cars45?
The mere lack of structure for us is the competition. I think the market is too large for anyone to be narrow-minded. There is so much value that can be extracted from this industry and so we are very focused on creating structures and opportunities within the market. We have our eyes on valuable business models and others worth keeping an eye on; but fundamentally, the lack of structure in the market is the competition and we are working hard at enhancing and solving that challenge.
How will you rate the automobile industry in Nigeria in the last three years?
Nigeria’s automotive industry is extremely valuable, but then, it is one of the most fascinating industries in Nigeria simply because of the sheer number of entrepreneurs and individuals who are able to hustle hard and grind. If there is one industry, I find to be feeding a lot of people, maybe after the markets, the automotive segment is one of the biggest enablers of economic prosperity for a lot of people.
The beauty of it is that we have seen people who might have been excluded as a result of say lack of access to education, thrive in this space. I am enthralled by the amount of value that this industry can create for people irrespective of their social class and standing.
What needs to be done to improve demand for Made-in-Nigeria brand cars?
I don’t think it is right that we have a mentality that people should buy Made-in-Nigeria products just because we are Nigerians. We should strive to make products that are globally standardized and recognizable; products that can stand side by side with others in that category. Nigerian music, literature, fashion, and food have shown us that we can create products on that level and will have mass appeal globally.
We see what Nigerian banks are doing across Sub-Sahara Africa. In manufacturing, Dangote is exporting manufacturing expertise to countries across the continent. And it’s nothing new — if you look at the past, Nigeria led the charge helping to standardize the civil service across Africa.
And so, we should have moved past the sentiment that we should accept something just because it is made in Nigeria. We should be an exemplar of excellence. As we have seen, people are always willing to pay a premium on Nigerian products that have demonstrated this excellence.
Customs wants a cut in import duties for cars, how will it affect the automotive industry in Nigeria?
The reality is that every single country that has wanted to grow its local automotive manufacturing industry reduced vehicle imports. So, it is a natural transition that would occur. However, in Nigeria, we have a high demand for cars.
Therefore, what we need to do is to make a strategic transition that must be robust and all-inclusive, addressing pain-points like power, distribution, and accessibility is closely linked to the issue of financing. If we can fix finance, which in turn would make the cars more affordable, people would buy and that would keep the factories running. The automotive industry and financing go hand in hand.
When people cannot afford to buy new or used cars, the automotive industry will not thrive. Any investor who sees that there is a high number of cars being purchased in your market will be willing to make the needed investment, so if we require a hydro-thermal plant to power the automotive plants, they’ll build one.
The automotive industry will only grow and thrive to the degree that people are able to purchase cars and not by the number of cars that are manufactured locally. If we don’t fix financing for motor vehicles, we can’t accelerate local manufacturing penetration.
How did Cars45 overcome the black market to engrave its footprint in the sell & buy used cars market?
Essentially, what we have done is to bring transparency, speed, and structure to a highly fragmented space. And we are glad that people have been very receptive to the service, every day it’s about building. We are never perfect at what we do, and we are constantly chasing perfection. We have a mindset where we know we may never be perfect, but we always try to be perfect and that really is our notion on how we operate, and our core goals are really around operational excellence. This is what has helped us to cement our place in the market.
In which states is Cars45 operating and which states do you see revenue potential for Cars45 to expand into?
Currently, we have over 60 retail inspection centres across Lagos, PortHarcourt, Abuja, Ibadan, Kano, and Benin. We also have over 200 locations across these cities where consumers can get verified cars to buy at very affordable prices. We are looking to expand to other cities across the country before the year ends. The revenue potentials of other states outside where we currently operate is a function of return on investment. If you have commercial activities taking place in that space, every market has the potentials to grow and bloom.
So, for us the question is, are there cars currently being traded in those places? Yes. Based on volume and population, it won’t be the same as what you’ll find in the tier-one cities. But if you properly do an analysis in terms of what the market potentials look like, that should help you determine how much you invest financially and the management bandwidth that would be invested as well in a manner that is commensurate with the ROI that you expect. Every product that you’ll describe as a standardized product is available in every city.
What differentiates Cars45 from other competitors in the market?
We are very humble about our knowledge and we’ve learned to respect the market. So, we don’t come with an attitude that we know the market, but we come with the mindset that as long as the market demands it, we are going to deliver it. Customers get enormous value, especially an automotive lifetime experience.
The reality is that by coming into our ecosystem, you are not just buying or selling a car, you are buying an automotive experience. We are that platform that gives access and also helps in your decision-making process, making it more transparent for you to understand the things that are necessary and giving you the best value towards maintenance, disposal, and purchase of a car. We also give the best advice and a wide range of options as well; so, really, it’s a 360 lifestyle that we provide. We come up with a lot of products to service our customers.
What birthed the idea to set up Cars45?
We created Cars45 basically to fill a gap we found in the automobile industry, particularly around how people buy and sell used cars. If you think about it, when people talk about the automobile policy, it is focused on the one percent because everything is focused on brand new cars. However, 99% of the cars that people drive are used cars.
There are a lot of problems around pricing and how people verify cars, including various things around it. I have had issues trying to buy or sell cars. So, I figured that it’s a big industry. It affects a lot of people and it definitely needs some level of transparency and efficiency. We also saw that it was something that affects a lot of people, with lots of challenges but it is a very important industry.
How will you describe the growth of Cars45 since the establishment?
From day one, we have always been about bringing trust and transparency into the market. We found that demand had come from an initial service that we had provided which is easy liquidation for anyone that wanted to sell their car and similarly supply to car dealers. A demand had come for us to look deeper into the market, beyond the initial problem that we had solved because we are very keen on taking customer feedback. We began to craft our business to address the most common challenges in the market which is easy access to verified cars.
Taking a lead from that is affordability; if you look at the industry, you will notice that the automotive industry and financing go hand in hand. Our solutions have solved the problem of valuation and verification which has now made it possible for financing houses to lend and provide financing for people to purchase cars. We have also put structures in place to support those who bought cars in the system with servicing and vehicle maintenance.
This is in addition to our premium inspection service which has opened a new vista of consumers to us, and our emergency service that helps stranded motorists when they are stuck. These are the services that show that we are much more than a platform for just trading vehicles; it’s a platform where anything automotive can be achieved. Cars45’s growth has been possible as a result of the market acceptance of its value-adding services.
What’s the short-term and long-term plan of Cars45 for its market base?
In the short term, our major plan is to help lubricate the wheels of the automotive trading environment. Typically, in its simplest form, this would mean making the process of buying and selling cars as simple as possible for people. In the long term, our vision is to create and enhance the trading environment and unlock the real value in this industry.
There are so many opportunities beyond trading in the automotive value chain and if we are able to create a very transparent, transactional and valuable trading base, this would enable partnerships and collaborations that will build the other sectors which in some cases are much more viable than trading. We want to create an environment where everything automotive can be done.
Why some businesses in Lagos may not be allowed to open in 2 weeks
Business owners and managers who wish to commence operations must put in place the appropriate facilities and working environment to help contain the spread of the COVID-19.
Lagos state government has stated that businesses may not be allowed to open after 2 weeks unless they successfully obtain the provisional clearance certificate as directed.
The provisional clearance certificate is the final clearance given to businesses under the Register-to-open initiative, certifying that they have fulfilled all conditions as required and may now be allowed to commence operations in line with the given safety guidelines.
According to a tweet at the official twitter handle of the Lagos state government, business owners and managers who wish to commence operations must put in place the appropriate facilities and working environment to help contain the spread of the COVID-19.
“Appropriate screening equipment for COVID-19, such as contactless temperature checkers must be available for entrants into the facility; separate ingress and egress points must be conducted in a staggered and orderly manner,” the Director-General, Lagos State Safety Commission, Mr. Lanre Mojola said in the tweet.
Mojola added that relaxation centres such as bars, nightclubs, spas, gyms, cinemas and parks are to remained closed until further directives are given to them, after subsequent review of the situation.
However, social clubs with registered trustees will be permitted to open in two weeks’ time upon obtaining provisional clearance certificate, Mojola stated.
The Director-General continued that social clubs with registered trustees will be permitted to open in two weeks’ time upon obtaining provisional clearance certificate through the registration portal https://t.co/dnk2g74y8y.@jidesanwoolu @safety_lasg #ForAGreaterLagos #CovidLASG
— The Lagos State Govt (@followlasg) June 6, 2020
He stated that eateries and restaurants outside hotels are only permitted to offer take-out services as no dining activity will be tolerated.
Mojola emphasized that registration for the mandatory ‘Register-To-Open’ policy is at zero cost, easy and user friendly, urging that businesses that are yet to obtain the safety compliance certificates should ensure registration on the portal as stipulated and await their clearance.
COVID-19 Update in Nigeria
On the 6th of June 2020, 389 new confirmed cases and 9 deaths were recorded in Nigeria bringing the total confirmed cases recorded in the country to 12,233.
The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to rise as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 12,233 confirmed cases.
On the 6th of June 2020, 389 new confirmed cases and 9 deaths were recorded in Nigeria.
To date, 12233 cases have been confirmed, 3826 cases have been discharged and 342 deaths have been recorded in 35 states and the Federal Capital Territory having carried out 74,999 tests.
COVID-19 Case Updates- 6th June 2020
- Total Number of Cases – 12,233
- Total Number Discharged – 3,826
- Total Deaths – 342
- Total Tests Carried out – 74,999
The 389 new cases were reported from 23 states- Lagos (66), FCT (50), Delta (32), Oyo (31), Borno (26), Rivers (24), Edo (23), Ebonyi (23), Anambra(17), Gombe (17), Nasarawa (14), Imo (12), Kano (12), Sokoto (12), Jigawa (8), Ogun (7), Bauchi (5), Kebbi (2), Kaduna (2), Katsina (2), Ondo (2), Abia (1), Niger (1).
The latest numbers bring Lagos state total confirmed cases to 5729, followed by Kano (997), Abuja at 912, Katsina, and Edo (387), Oyo (365), Borno (348), Kaduna (337), Ogun (336), Rivers (332), Jigawa (290), Bauchi (286), Gombe (201).
Delta State has recorded 148 cases, Sokoto and Kwara (127), Plateau (113), Nasarawa (104), Ebonyi (103), Zamfara (76), Imo (59), Yobe (52), Osun (49), Akwa Ibom (45), Adamawa and Niger (42), Ondo (40), Kebbi (35), Bayelsa and Enugu (30), Anambra (29), Ekiti (25), Taraba (18), Abia (16), Benue (13), while Kogi state has recorded only 3 cases.
Lock Down and Curfew
In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.
The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, President Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.
|Date||Confirmed case||New cases||Total deaths||New deaths||Total recovery||Active cases||Critical cases|
|June 6, 2020||12233||389||342||9||3826||8065||7|
|June 5, 2020||11844||328||333||10||3696||7815||7|
|June 4, 2020||11516||350||323||8||3535||7646||7|
|June 3, 2020||11166||348||315||1||3329||7522||7|
|June 2, 2020||10819||241||314||15||3239||7266||7|
|June 1, 2020||10578||416||299||12||3122||7157||9|
|May 31, 2020||10162||307||287||14||3007||6868||7|
|May 30, 2020||9855||553||273||12||2856||6726||7|
|May 29, 2020||9302||387||261||2||2697||6344||7|
|May 28, 2020||8915||182||259||5||2592||6064||7|
|May 27, 2020||8733||389||254||5||2501||5978||7|
|May 26, 2020||8344||276||249||16||2385||5710||7|
|May 25, 2020||8068||229||233||7||2311||5524||7|
|May 24, 2020||7839||313||226||5||2263||5360||7|
|May 23, 2020||7526||265||221||0||2174||5131||7|
|May 22, 2020||7261||245||221||10||2007||5033||7|
|May 21, 2020||7016||339||211||11||1907||4898||7|
|May 20, 2020||6677||284||200||8||1840||4637||7|
|May 19, 2020||6401||226||192||1||1734||4475||7|
|May 18, 2020||6175||216||191||9||1644||4340||7|
|May 17, 2020||5959||388||182||6||1594||4183||7|
|May 16, 2020||5621||176||176||5||1472||3973||7|
|May 15, 2020||5445||288||171||3||1320||3954||4|
|May 14, 2020||5162||193||168||3||1180||3815||4|
|May 13, 2020||4971||184||164||6||1070||3737||4|
|May 12, 2020||4787||146||158||6||959||3670||4|
|May 11, 2020||4641||242||152||10||902||3589||4|
|May 10, 2020||4399||248||142||17||778||3479||4|
|May 9, 2020||4151||239||127||11||745||3278||4|
|May 8, 2020||3912||386||118||10||679||3115||4|
|May 7, 2020||3526||381||108||4||601||2818||4|
|May 6, 2020||3145||195||104||5||534||2507||1|
|May 5, 2020||2950||148||99||5||481||2370||4|
|May 4, 2020||2802||245||94||6||417||2291||2|
|May 3, 2020||2558||170||88||2||400||2070||2|
|May 2, 2020||2388||220||86||17||351||1952||2|
|May 1, 2020||2170||238||69||10||351||1751||2|
|April 30, 2020||1932||204||59||7||317||1556||2|
|April 29, 2020||1728||196||52||7||307||1369||2|
|April 28, 2020||1532||195||45||4||255||1232||2|
|April 27, 2020||1337||64||41||0||255||994||2|
|April 26, 2020||1273||91||41||5||239||994||2|
|April 25, 2020||1182||87||36||3||222||925||2|
|April 24, 2020||1095||114||33||1||208||855||2|
|April 23, 2020||981||108||32||3||197||753||2|
|April 22, 2020||873||91||29||3||197||648||2|
|April 21, 2020||782||117||26||3||197||560||2|
|April 20, 2020||665||38||23||1||188||466||2|
|April 19, 2020||627||86||22||2||170||436||2|
|April 18, 2020||541||48||20||2||166||356||2|
|April 17, 2020||493||51||18||4||159||317||2|
|April 16, 2020||442||35||13||1||152||277||2|
|April 15, 2020||407||34||12||1||128||267||2|
|April 14, 2020||373||30||11||1||99||263||2|
|April 13, 2020||343||20||10||0||91||242||2|
|April 12, 2020||323||5||10||0||85||228||2|
|April 11, 2020||318||13||10||3||70||238||2|
|April 10, 2020||305||17||7||0||58||240||2|
|April 9, 2020||288||14||7||1||51||230||2|
|April 8, 2020||274||22||6||0||44||226||2|
|April 7, 2020||254||16||6||1||44||204||2|
|April 6, 2020||238||6||5||0||35||198||2|
|April 5, 2020||232||18||5||1||33||194||2|
|April 4, 2020||214||5||4||0||25||185||0|
|April 3, 2020||209||25||4||2||25||180||0|
|April 2, 2020||184||10||2||0||20||162||0|
|April 1, 2020||174||35||2||0||9||163||0|
|March 31, 2020||139||8||2||0||9||128||0|
|March 30, 2020||131||20||2||1||8||121||0|
|March 29, 2020||111||22||1||0||3||107||0|
|March 28, 2020||89||19||1||0||3||85||0|
|March 27, 2020||70||5||1||0||3||66||0|
|March 26, 2020||65||14||1||0||2||62||0|
|March 25, 2020||51||7||1||0||2||48||0|
|March 24, 2020||44||4||1||0||2||41||0|
|March 23, 2020||40||10||1||1||2||37||0|
|March 22, 2020||30||8||0||0||2||28||0|
|March 21, 2020||22||10||0||0||1||21||0|
|March 20, 2020||12||4||0||0||1||11||0|
|March 19, 2020||8||0||0||0||1||7||0|
|March 18, 2020||8||5||0||0||1||7||0|
|March 17, 2020||3||1||0||0||0||3||0|
|March 16, 2020||2||0||0||0||0||2||0|
|March 15, 2020||2||0||0||0||0||2||0|
|March 14, 2020||2||0||0||0||0||2||0|
|March 13, 2020||2||0||0||0||0||2||0|
|March 12, 2020||2||0||0||0||0||2||0|
|March 11, 2020||2||0||0||0||0||2||0|
|March 10, 2020||2||0||0||0||0||2||0|
|March 9, 2020||2||1||0||0||0||2||0|
|March 8, 2020||1||0||0||0||0||1||0|
|March 7, 2020||1||0||0||0||0||1||0|
|March 6, 2020||1||0||0||0||0||1||0|
|March 5, 2020||1||0||0||0||0||1||0|
|March 4, 2020||1||0||0||0||0||1||0|
|March 3, 2020||1||0||0||0||0||1||0|
|March 2, 2020||1||0||0||0||0||1||0|
|March 1, 2020||1||0||0||0||0||1||0|
|February 29, 2020||1||0||0||0||0||1||0|
|February 28, 2020||1||1||0||0||0||1||0|
Nigerians now seeing CBN Intervention funds as audio money
Despite the rhetoric, majority of Nigerians are still wary of the so called N1 trillion intervention fund.
When the COVID-19 pandemic came with all her fangs, world leaders swung into action with the creation of intervention funds and palliatives to ease the burden of the average citizen.
In Nigeria, asides the palliatives of foodstuff given by state and federal governments alike, drums were rolled when the Central Bank of Nigeria disclosed its support for critical sectors of the economy.
The apex bank first initiated a fund of N50 billion soft loan to small businesses. The N50 billion Targeted Credit Facility (TCF) was to serve as a stimulus package to support households and micro, small and medium enterprises (MSMEs) whose economic activities have been significantly disrupted by the COVID-19 pandemic.
The financial institution for the scheme is NIRSAL Microfinance Bank (NMFB) and the interest rate under the intervention was fixed at 5% per annum (all-inclusive) up to February 28, 2021, and thereafter, the interest on the facility shall revert to 9% per annum (all-inclusive) as from March 1, 2021.
Next, it increased its intervention by another N100 billion in loans to support health authorities to ensure laboratories, researchers, and innovators work with global scientists to patent and produce vaccines and test kits in Nigeria so as to prepare for possible crisis ahead.
Finally, it increased its intervention in boosting local manufacturing and import substitution by another N1 trillion across all critical sectors of the economy.
Despite the rhetoric, majority of Nigerians are still wary of the so called N1 trillion intervention fund. The CBN is yet to issue any policy guideline for its implementation and failed to provide further details in its monetary policy committee meeting held last week. This has led many to start to view these promises as “audio money” a social media term for financial promises that are never fulfilled.
The journey thus far
The Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) Microfinance bank, on behalf of the Central Bank of Nigeria (CBN), has started the disbursement of the N50 billion Targeted Credit Facility (TCF) to the beneficiaries. As at April, it noted that it had received over 80,000 applications for the facility, out of which 40,000 of them were households.
As expected with such funding, the sentiments have been both positive and negative. While some have said they have gotten the funds, others have complained incessantly about the various challenges encountered in the process of obtaining or applying for the loans. Pockets of tweets revealed the general struggles of obtaining the loans. Several applicants have complained about not being able to open accounts or access the facilities and others have complained about making inquiries without responses.
Bola Murtala explained to Nairametrics that “I applied online around the 30th of April, filled out the forms, and submitted. After I got a reply in my email that my application has been received, but then I haven’t heard back from them since then. I wouldn’t know what’s going on but I have seen people who say they got an approval. How far it is true, I wouldn’t know.”
Another applicant, Okey Adinde, said “I applied and received a message telling me that I will be contacted if there was any other document required and if I didn’t send that document after 72 hours after the mail, my application will be declined. Since then, I have not heard from them.”
One Twitter user also complained about being asked to tender collaterals even though the loans do not require any.
Clearly, the program is not without its own hiccups. During an interview with Channels TV, the Managing Director of NIRSAL Microfinance Bank Plc, Abubakar Kure, explained that the nationwide lockdown and restrictions had a major challenge to the smooth processing of the facility. Yet, on the company’s website, it claims to have disbursed over N25 billion and going.
However, there are positive comments too:
Fidelis Ayebae, the chief executive officer of Fidson Healthcare Plc. explained that his company had received N2.5 billion from the central bank’s coronavirus intervention fund. Dollar scarcity and a weakening naira had heightened the inflation on inputs of many pharmaceutical firms in the country.
“You now have a situation where nobody is holding letters of credit, no manufacturer is getting anything from their suppliers abroad because even the ones that we owe, we are not able to pay,” said Ayebae, who also heads the 180-member pharmaceutical group of Nigeria’s manufacturers association.
In truth, sentiments on the program is still burdened with the same lack of faith and trust in systemic leadership and Nigerians have had their fair share of disappointments. Even as the CBN and NIRSAL have set off on a good note by augmenting businesses and individuals in key areas to withstand the impact of the pandemic, the need for transparency cannot be overemphasized.
By employing tighter systems, particularly in the area of customer relations, while also clearly disclosing its activities, the system will assuage the fears of Nigerians whose faiths have been battered by deceptive leadership amongst others.
It is only then that they’ll know for sure that the days of audio money are over and that its leaders can be trusted.