The Nigerian government has hinted that it would establish an Entrepreneur Bank to help fund companies. Vice President Osinbajo dropped the hint when speaking with women traders. This bank would become a more structured form of TraderMoni, MarketMoni, and FarmerMoni through which the government has used to offer micro-credits to micro-entrepreneurs. The vision is “a bank that will be a bit more nimble about entrepreneurship; a bank that has a bit more flexibility”. Certainly, government has given up Bank of Industry which was designed to seed enterprises as a local DFI but transmuted into a colossal bureaucracy, demanding sureties that only those with rich uncles can have.
Vice President Yemi Osinbajo says the federal government plans to establish an Entrepreneur Bank to provide flexibility in provision of facilities to businesses.
Mr Osinbajo disclosed this while fielding questions from a cross-section of women traders at a programme tagged `Next Level Conversation’ on Monday in Abuja.
The women, who were mostly entrepreneurs, were drawn from the education, environment, agriculture, real estate, hospitality among other sectors.
The vice president said the issue of giving cheap loans to small businesses had featured prominently in the President Muhammadu Buhari-led administration.
“We have been able to deal to some extent with small and micro businesses; we have TraderMoni, MarketMoni, FarmerMoni; which are basically very small credit schemes.
“We are also looking at an Enterprise Bank or an Entrepreneur Bank which is one of the types of establishment we are looking at.
While I commend this micro-effort to fix the funding paralysis in Nigeria, the nation needs reforms to stimulate real capital injection into the economy. Government cannot be involved in all these areas: private sector can do them more efficiently if government offers the path for companies to make money, and do well for society.
Government should offer new VC (venture capital) firms in Nigeria a ten year tax incentive on profits if they have asset base of at least $50 million and will deploy the capital in Nigerian startups within 10 years.
Offer new VC firms in Nigeria the opportunity to repatriate 100% of profit within ten years. That will help the country to attract foreign investors to make Nigeria home.
If we have this type of incentive, we will see many VC funds making Nigeria home to explore opportunities in Nigeria and continental Africa. That influx of capital will have many multiples of benefits to our economy, our people, and the Nigerian technology space. Most especially our tech firms will stay home.
Yes, Entrepreneur Bank can have asset of $100 million but Nigeria can unlock $50 billion through smart reforms in the venture capital and private equity sectors. Mr. Vice President should take that conversation to the next level and push for reforms in the capital market. We need entrepreneurs and not just small business owners; TraderMoni is for small business owners, VC capital (and similar funds) create entrepreneurs. Entrepreneurs build nations; TraderMoni supports families.