Small Businesses Get Some Succour

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Keeping faith with his electoral promise, Lagos State governor, Akinwunmi Ambode, recently provided a N1 billion intervention fund for 705 small and medium enterprises at a concessionary rate of interest. Gboyega Akinsanmi writes

He was a pessimist. He never believed any government; neither did he ever trust any political leader. His feelings might have been due to the huge catalogue of promises governments at different levels had failed to honour in the past decades. However, Mr. Tosin Adesanwo got a shock of his life when he emerged one of the entrepreneurs that benefitted from the Lagos State Employment Trust Fund (LSETF).

Adesanwo, a social entrepreneur, acknowledged that he was compelled to apply when the Lagos State Government rolled out the scheme, sometimes in 2016. His reason is not far-fetched. He said he never believed any government could make good its promise in this country. Aside, he never believed because most governments “are finding it hard to survive at this time of recession.”

But to his amazement, his application was successful. He said he received a support of N5 million from the Lagos State Government, which he said, would be used to boost his business. Until his application sailed through, Adesanwo thought the scheme “was a mere hoax or at best a tool of politics.” For these reasons, he dismissed it initially, but though finally yielded to persuasion from friends and relatives to participate.

Mr. Chike Obi shared a similar story too. When he heard about the scheme, Obi quickly dismissed it. He said: “I felt it was just one of the gimmicks of political leaders.” After much persuasion, Obi reluctantly applied for the scheme, which he said, did not cost a dime. But that bold step, according to him, has become a reality. He said his emergence “has disproved his impression about the government.

“Most of the beneficiaries did not initially believe that the scheme was real. We just applied. But Governor Ambode has brought real change to governance. The selection process was fair and transparent. There is no consideration for gender, religion and tribe. Every qualified applicant received some support irrespective of which religion he or she belongs to and where he or she comes from.”

Like Adesanwo and Obi, 703 other entrepreneurs benefitted from a sum of N1 billion the state government doled out last week to boost small and medium enterprises and create more jobs for the residents of the state. The fund was part of N25 billion, which Ambode said, would be provided to support at least 100,000 small businesses and pull out thousands of youths from the realm of uncertainties.

Some of the recipients shared their experiences after the governor presented them cheques recently. For them, the scheme is truly pro-people, even though they did not believe initially something good could come out of it. They said the Ambode’s administration “has demonstrated strong will to lift up millions from poverty and passion to create wealth at a time national economy is greatly troubled.”

By this intervention, Ambode truly stands with the masses, says Mrs. Ifueko Omoigui-Okauru, Chairman of LESTF Board of Trustees. For her, it is a fulfillment of promises the governor made during his campaign. But this intervention preceded the 2015 electioneering. He started with La Roche Leadership Foundation, which he established shortly after he retired from the state public service.

Through La Roche, Ambode annually recognised a number of social entrepreneurs for their intervention. In June 2014, he specifically commended the Executive Director of Street-to-School Initiative, Mrs. Tosin Taiwo, whose initiative still provides essential support for primary schools and pupils in Lagos suburbs. That attests to his passion to touch lives and empower the youths.

So, just after he assumed office in 2015, Ambode initiated a Lagos State Employment Trust Fund Bill, which the State House of Assembly passed into law. Under the law, the state government would annually release a sum N6.25 billion to entrepreneurs for a period of four years. By 2019, the fund is expected to have disbursed a whopping sum of N25 billion to small-scale businesses.

The fund was not established without a clear mandate, says the governor. By 2019, according to him, it is projected that at least 300,000 direct jobs and 600,000 indirect jobs will be created through this intervention. Likewise, he said, it is expected that wealth will be created. So, unlike commercial banks that charge as high as 25 per cent interest rate, the beneficiaries will only pay 5 per cent interest rate per annum.

This incentive is unprecedented in this history of Nigeria, says Omoigui-Okauru. At a time like this, she explained that the need “to provide jobs and create wealth shapes the government’s decision to peg the interest rate at 5 per cent.” During his campaign, she said the need “to provide jobs was clearly on the mind of Ambode. He spoke about it. He talked about it. And he made good his promise.”

She said Ambode started with the enactment of the law setting up the fund. By this single decision, Omoigui thus said there “is no better testimony to the passion of a man who has been called to serve than this.” Ambode did not just ensure the enactment of the law. Also, he followed up with the constitution of the Board of Trustees for the Fund. On the day the board was inaugurated, Omoigui disclosed that a sum of N6.25 billion was transferred to the Fund.

She said the mandate of the board was clear. She said it was to deliver on the promise Ambode “has made to the residents of Lagos. It is to ensure the process is fair and transparent. It is to ensure the scheme covers all local councils in the state. It is to ensure there is no favour as to party, religion or tribe. Women constitute about 50 per cent of Lagos population. Gender is also a factor.”

To realise this mandate requires that a structure is put in place, says Omoigui. She thus said it “is easy to give out money, but it is not easy to get the money back. It is easy to say the process will be fair, but it is not easy to achieve it if we do not have the processes to do it. That is what we spent our time doing. It is not also very easy, whatever we do or whatever we achieve, carrying all members along.

“As they say, a house divided cannot stand. So, we spent time putting our heads together; building our team; getting the staff; ensuring that we have the right processes and guidelines to set the board up and to set up the processes to secure the fund. We also spent a lot of time ensuring that we had a process that we could just define. But guess what the governor was doing while we were doing all of these.

“He was telling us to hurry up. He acknowledged that all these processes were good, but my people needed to be employed. It is not just that we want to ensure we do the right thing. We also have a passionate governor on our necks, putting pressure that yes, process is good, but please deliver.”

By November, Omoigui said the board was ready to launch out, though exercised some restraint in order to ensure the scheme did not fail because huge fund was entrusted to the board. She thus said a large project like this “requires a pilot scheme first. We reached out to different bodies within the state that had put in place process themselves to generate entrepreneurs, who are looking for funding, whom they had already trained and who would cut across the breadth of the state.”

After the pilot scheme, she said the board “came up with 705 entrepreneurs who had gone through the process and screened by reputable consulting firm, Price Walter Coopers. The process is still on-going and funds will be disbursed in phases. But we have funding available for people who requested for as low as N30, 000 to small and medium enterprises of the maximum of N5 million.

“The applications cut across the breadth of different kinds of enterprises in the state from those who just want to buy a camera and beans to make akara to those who have left oil firms because of recession and plan to set up logistic firms. In this particular case, there are two women, who just applied, but never believe their application would sail through,” Omoigui explained.

But Ambode formally presented cheques to 705 beneficiaries recently. Under the pilot scheme, a total sum of N1 billion was doled to the beneficiaries. On this ground, he charged them “to use these funds responsibly, grow your businesses, create jobs for our unemployed youths and contribute to the growth of the Lagos State GDP,” which he said, was the basis for establishing the fund.

Before he assumed office, Ambode said he had identified unemployment as a major socio-economic challenge facing Lagos State and Nigeria as a whole in the course of the electoral campaign. On this ground, he said he worked towards setting up the fund as a direct response “to address the challenge of unemployment and support the youths, entrepreneurs, artisans and unemployed residents of the state.

“We have kept our word. We created a dedicated Ministry of Wealth Creation and Employment, whose mission is to promote and sustain entrepreneurship and employment. The funds are targeted at small and medium scale businesses and individuals including carpenters, block makers, hairdressers, electricians, bakers, fashion designers, cake makers, food sellers, kerosene retailers, painters, plumbers, photographers and light manufacturers of liquid soaps and water among others.”

Ambode said the beneficiaries had made history as the first set of beneficiaries of this fund. For every N1 million disbursed, he projected, a minimum of five jobs should be created around the business value chain. This projection explained why he said the fund “has been provided at a very affordable rate of 5 per cent per annum, far cheaper than the prevailing bank interest of 25 per cent per annum.”

He therefore said “this is our modest way of reflating the Lagos economy, creating jobs and getting our youths gainfully occupied. Those of you here today, the first beneficiaries of this initiative, will be the agents through which our country can overcome its current economic challenges. I call on market women and female artisans to take advantage of the fund and expand your businesses.”

Ambode also tasked the LSETF “to pay special attention to the Entertainment Industry and the Tech Hubs in Sabo, Yaba area. These are new areas with huge potential for growth and job creation.” Even though it appeared ambitious, he subscribed to the board’s plan “to empower at least 100,000 micro, small and medium enterprises as well as create 300,000 direct jobs and 600,000 indirect jobs by 2019.”

Ambode (5th right on second line), in a group photograph with the LSETF Board members and beneficiaries of the scheme at the cheque presentation ceremony at the LTV Blue Roof, Ikeja…recently