The FATE Institute of FATE Foundation recently launched the State of Entrepreneurship in Nigeria 2022 report at the end of the 8th Annual FATE Institute Policy Dialogue Series on Entrepreneurship which was held on Thursday, November 17, 2022.
This year, the State of Business in Nigeria report was launched alongside a second report looking at “Bridging the Access to Finance Gap for Nigerian Entrepreneurs”. Both reports were developed by the FATE Institute which is the research, policy and support arm of the FATE Foundation to lead innovative thinking and create a framework that enables sharing of ideas and solutions to business problems in Nigeria.
In introducing the report on the Policy, the Chairman of the FATE Foundation, said Mr. Adeola said in his speech,
“State of Entrepreneurship in Nigeria Report provides an assessment of the entrepreneurial environment in Nigeria using five key indicators: Entrepreneurship Performance, Skill Acquisition, Innovation & Technology, Opportunities Exposure, and Environmental Sustainability Business. The report “Bridging Access to Finance Gap for Nigerian Entrepreneurs” takes an in-depth approach to understanding the access to finance gap in Nigeria and provides recommendations on how to move forward. Both reports were developed to provide information and advice to guide the government and environmental organizations in policy and program design/implementation to improve results regarding access to funds.
Key findings from the State of Entrepreneurship in Nigeria 2022 report include: 8,611 businesses surveyed in 36 States in Nigeria including the FCT; more than half of the entrepreneurs surveyed (51%) are 30-39 years old; Businesses led by men rose to 61% while businesses led by women accounted for 39%; 80% of the businesses surveyed were nano businesses (41%) or small businesses (39%); half of the businesses surveyed (50%) were 5 years or less; For the second time in a row, the outlook for opportunities ranked high on the business index and the resource environment ranked the bottom; Imo state ranked highest with a score of 0.82, followed by Bauchi – 0.72, Delta – 0.70, Gombe and Plateau both at 0.69. Kogi and Taraba States and the FCT rank below 0.40. The full report can be downloaded from – http://www.fatefoundation.org/2022soe/
Highlights from the “Bridging Access to Finance Gap for Nigerian Entrepreneurs” report include: personal savings are cited as the main source of finance by 74% of entrepreneurs followed by family and friends (37%); for private institutions, cooperative societies ranked at 41% followed by small banks at 27%; only 19% of entrepreneurs got money from commercial banks; commercial bank credit to the private sector in 2021 was ₦22 million but only 0.38% of that credit was disbursed to small businesses.
Demand side challenges include high cost of borrowing; low level of trust; limited awareness of possibilities such as the portable registry. Local Party challenges include lack of financial literacy and financial preparedness; poor quality of information on creditworthiness and training from previous financing programs. Policy recommendations for disbursements include better mapping and segmentation of NMSMEs for financing; expanded financial reporting; and the use of technology for digital information on credit. The full report can be downloaded here – http://www.fatefoundation.org/accesstofinance/
Also speaking at the launch of the report, the Director General, FATE Foundation, Adenike Adeyemi, said, “There is a need for an objective approach to bridge the gap between the use of technology, improving the digital status of entrepreneurs and evaluate the impact of current financing programs.”
The FATE Foundation is Nigeria’s largest non-profit that provides business knowledge and development to enable Nigerians to start, grow and expand sustainable businesses. FATE Foundation was founded in 2000 by Mr. Fola Adeola, Founder and pioneer Managing Director of Guaranty Trust Bank, with a mission to enhance economic growth by promoting business and entrepreneurship in Nigeria.