The FATE Institute of FATE Foundation has released the State of Entrepreneurship in Nigeria 2022 report and a second report titled Bridging the Access to Finance Gap for Nigerian Entrepreneurs at the recently concluded 8th Annual FATE Institute Policy Dialogue Series on Entrepreneurship, which took place on Thursday, November 17, 2022.
Both reports were developed by the FATE Institute which is the research, policy and advocacy arm of FATE Foundation leading innovative thinking and creating platforms to enable idea exchange and problem-solving strategies around entrepreneurship in Nigeria.
Launching the reports at the Policy Dialogue, the Chairman of FATE Foundation, Mr. Fola Adeola during his speech said;
State of Entrepreneurship in Nigeria 2022 Report provides an assessment of the entrepreneurship landscape in Nigeria using five key indicators: Business Performance, Skills Acquisition, Innovation & Technology, Perception of Opportunities, and Enabling Business Environment.
The Bridging Access to Finance Gap for Nigerian Entrepreneurs report takes a deep-dive approach to understand the access to finance problem in Nigeria and proffering recommendations on the way forward. Both reports were developed to provide data insights and recommendations to guide the government and ecosystem players on policy and program design/implementation to improve outcomes around accessing finance.
Key data highlights from the State of Entrepreneurship in Nigeria 2022 report include:
8,611 businesses were surveyed across the 36 States in Nigeria including the FCT;
more than half of the entrepreneurs surveyed (51%) were aged 30-39;
male-led businesses stood at 61% with female-led businesses being 39%;
80% of the businesses surveyed were either nano (41%) or micro (39%) businesses;
half of the businesses surveyed (50%) are 5years old or less;
For the second time in a row, perception of opportunities ranked highest on the entrepreneurial index and enabling environment ranked the lowest; Imo state ranked the highest with a score of 0.82, followed by Bauchi – 0.72, Delta – 0.70, Gombe and Plateau states both at 0.69. Kogi and Taraba States and the FCT ranked overall lowest with index score below 0.40.
Key highlights from the Bridging Access to Finance Gap for Nigerian Entrepreneurs report include:
personal savings cited as main source of finance by 74% of entrepreneurs;
followed by family and friends (37%);
for institutional sources, cooperatives societies ranked at 41%;
followed by microfinance banks at 27%;
only 19% of entrepreneurs received finance from commercial banks;
commercial banks credit to the private sector in 2021 was ₦22 trillion but only 0.38% of this credit was disbursed to small businesses.
Demand Side challenges include the high cost of borrowing; low level of trust; limited awareness of enablers such as the moveable collateral registry.
Supply Side challenges include Limited financial literacy and investment readiness; poor data insights on credit worthiness and learnings from previous funding programs. Policy recommendations on bridging the gap include better mapping and dimensioning of the NMSME segment for funding; expansion of credit reporting coverage; and leveraging tech for digital identity on creditworthiness.
Also speaking at the launch of the reports, the Executive Director, of FATE Foundation, Adenike Adeyemi said, “There is the need for an intentional approach to bridging the access to finance gap leveraging technology, improving the digital footprint of entrepreneurs and assessing the impact of current funding programs.”
FATE Foundation is Nigeria’s foremost non-profit providing entrepreneurship knowledge and enterprise to enable Nigerians start, grow and scale sustainable businesses. FATE Foundation was founded in 2000 by Mr. Fola Adeola, Founder and pioneer Managing Director, Guaranty Trust Bank, with a mission to foster wealth creation by promoting business and entrepreneurial development among Nigerians.
