18102022

14 — Vanguard, TUESDAY, OCTOBER 18, 2022
How Nigeria can
grow the economy,
reduce poverty—
Lajuwomi, Winock MD
•Says without stable currency, it will be very difficult
to attract FDI which is vital for economic growth
For over 15 years the name Akinsanmi Lajuwomi was ringing a bell in
the United Kingdom where the man worked with many blue chip
companies. But, despite his success as a business and technology
consultant in the United Kingdom in key roles for blue chip
organisations such as Sky Group (owners of Sky Sports), Discovery
Channel and Daily Mail group, Lajuwomi took the decision to return to
Nigeria and kick-start his dream business in the area of growing
medium, small and micro enterprises, not minding the teething
challenges ahead of him. After pitching his tent in the Nigerian business
environment under the brand name of Winock Lending Limited for
some years, Lajuwomi can now be described as one of the leading voices
in the area of business and economic development in Nigeria.
In this interview with Northern Region Editor, Soni Daniel and Ethel
Igboeche, Lajuwomi speaks authoritatively on what Nigeria needs to do
to grow the economy and reduce poverty for the overall interest of
Nigerians. Excerpts:
WHY did you choose to leave
the UK for Nigeria at a time
many are going the other way, and
immediately venture into micro
investments instead of pitching
your tent with one of the blue chips
where you once worked in the
United Kingdom?
We choose to invest in micro
ventures instead of blue chips for
three reasons: In Nigeria, there are
more micro ventures than blue chip
companies. Nigeria Bureau of
Statistics, NBS, survey conducted in
2017 revealed that there are 41.5
million MSMEs in Nigeria, and
99.8 percent of these are micro
ventures. So, Winock is targeting a
large and viable market segment
by focusing on micro ventures.
Secondly, even though MSMEs
account for 86 per cent of
employment and 48 per cent of GDP,
they unfortunately have only four
per cent access to credit finance
compared to blue chip companies.
We are increasing access to credit
finance for micro ventures so that
they can continue to add value to
the Nigerian economy.
Thirdly, if you study the history of
blue chips such as Dangote,
Globacom, Heirs Holdings, Apple,
Tesla, and Amazon, you will observe
that they all started off as micro
ventures and grew to become blue
chips mainly because of access to
sustainable finance. Inevitably,
some of the micro ventures that we
are supporting will grow to become
blue chips and compete globally.
To what extent has your company
assisted Nigerian micro ventures
to start and grow?
Our company has grown in leaps
and bounds over the past three years.
We started with 88 customers in
2019 and we have grown to over
7,000 customers in the F.C.T. We
have provided over 1.5 megawatts
of solar capacity to microbusinesses
such as phone chargers, barbers,
and eateries. We also financed over
2,000 freezers and sewing machines
for customers in 2021. We have
received numerous testimonials
from customers on how our services
have helped to improve their
livelihood. For example, we
financed solar for a phone charger
in Dei Dei named Hadiza. She was
able to increase her income by 100
per cent due to reduced cost of
electricity generation and longer
opening hours, and the additional
income was used to send her
children to better quality schools.
Furthermore, we are currently
developing an insurance brokerage
subsidiary to increase access to
microbusiness insurance to
mitigate losses from fire incidents,
especially in major markets.
Is it possible to know how much
Winock has given out as long or
short-term loans to micro
enterprises in Nigeria?
Winock has invested millions of
dollars in giving out solar
equipment, and cash loans to micro
ventures. We secure our funds from
foreign investors and local partners
that align with our vision and want
to add value to micro ventures.
Risk management
strategy
Our aim is to disburse over N70
billion by 2032 ($100 million), and
we have perfected a funding and risk
management strategy to achieve this
aim.
In how many states is Winock
operating or investing in?
We currently operate in the F.C.T.,
Niger and Nasarawa states. We
focus on semi-urban locations
where customers do not have easy
access to banks. We plan to expand
to all major commercial states in
Nigeria by 2030.
How have you found the
Nigerian operating system? Some
have complained that it is very
difficult to invest and succeed here.
What is your take on that?
We have found the Nigerian
operating system to be
manageable. Our experience has
been good because we focus on
developing strategies to address core
business problems. For example,
one of the big issues is the constant
depreciation of the Naira against
the Dollar which causes companies
to incur significant FX loss and
unexpected increase in operating
expense. We developed an
innovative FX hedging strategy that
•Akinsanmi Lajuwomi, Winnock MD... Micro ventures face several systemic challenges
has completely removed FX risk for
Winock. Although one cannot deny
that challenges such as insecurity,
poor electricity supply, and
economic instability exist; in my
opinion, a bigger problem is that
we Nigerians are self-defeating. We
assume that Nigeria is the worst
country in the world and as such,
most Nigerians do not think it to be
their responsibility to improve
Nigeria. I do not know of any
continent, country, state, or any other
form of community that started off
already developed. In fact, some
countries such as China, Malaysia,
Vietnam, and many more, were
behind Nigeria
i
n
development
in 1960,
however,
because the
citizens are
patriotic and
committed to
t h e i r
collective
wellbeing,
they have
been able to
overcome
t h e i r
challenges
and
have
developed
their countries. In the final analysis,
rather than complain incessantly
whilst being a part of the problem,
it is the responsibility of businesses
to develop legitimate and innovative
ways to survive in any given
environment whilst holding public
officials accountable to improve the
operating environment.
Winock also invests in solar
power, which is a form of
renewable and clean energy. Why
is the solar project not gaining
momentum in Nigeria as in other
climes despite its clear benefits
and affordability?
Solar is a sustainable form of
electricity supply, especially for
microbusinesses such as barbers,
phone chargers, eateries etc.
Considering that Nigeria has
abundant sunshine, solar ought to
be a leading source of electricity
supply. But the economics of solar,
and Nigeria’s macroeconomic
factors, make it difficult for solar to
gain momentum. At a national grid
level, a solar plant project will
require over 40 years to break even.
This is feasible in developed
countries because their economy is
more stable, and hyperinflation is
less likely. Whereas, in developing
countries like Nigeria, it is difficult
to make such long-term
investments, because inflation will
inevitably erode the investment. At
a business to business (B2B) or
business to customer (B2C) level,
solar was comparatively cheaper
per Kilowatt Hour (kWh) than using
a petrol generator. However, since
Winock’s main objective
is to drive down interest
rates for micro ventures;
we have developed and
perfected a plan to
reduce interest rates to
2.5 per cent monthly
from January 2023
the COVID
pandemic,
cost of solar
increased by
200 per cent
due to FX
scarcity for
importation,
and it is now
m o r e
expensive
than petrol
generator
per kWh
because
petrol is
subsidised.
This has
slowed down solar demand
significantly. If petrol subsidy is
removed, and the Dollar income
earned by the Federal Government
from crude sales is injected into the
FX market to increase liquidity, then
solar will become cheaper than
running a petrol generator,
although the reverse will be the case
if the Dollar income is not properly
invested by the Federal
Government.
Interest rate appears to be killing
micro ventures in Nigeria. What
difference does your company
make in this case since you seem
to be more involved in this area?
With regards to high microloan
interest rates in Nigeria, there are
two uncorrelated reasons behind
this: In the first instance, there are a
lot of loan sharks, especially in the
fintech space, that charge predatory
rates as high as one per cent daily,
to take advantage of the fact that
micro ventures do not have easy access
to loans. Central Bank of Nigeria and
National Information Technology
Development Agency have begun to
shut down a lot of these fintech lenders
that are operating illegally. In the
second instance, microfinance banks
charge five per cent interest monthly
on average.
This is mainly because the
operating cost of disbursing small
loans to millions of people is high
compared to disbursing large loans
to a handful of people. In addition,
investors charge lenders double
digit interest rates per annum
because of the perceived risk of
lending to micro ventures, which
equally affects the interest rates
given to micro ventures by the
lenders. Winock’s main objective is
to drive down interest rates for micro
ventures. We have developed and
perfected a plan to reduce interest
rates to 2.5 per cent monthly from
January 2023. If we achieve this
plan, it will revolutionise the
Nigerian credit finance industry.
Does Nigeria have enough
workable and sustainable MSME
policies that can propel growth or
does the country need more laws
and policies in that regard?
The reality is that there are a lot of
good policies in place, but there is
poor implementation and lack of
awareness. Before we can effectively
evaluate the impact of policies, I
think MSMEs need to first
maximise the existing ones to
determine whether the laws and
policies can propel growth.
Beyond policy framework, what
do you think should be done to
broaden the scope of micro
ventures in Nigeria?
Micro ventures face several
systemic challenges that need to be
addressed to enable them to thrive.
One of the key challenges faced by
micro ventures is the high cost of
renting a shop. This causes them to
set up illegal structures that is at risk
of being demolished without notice
by government. For example, F.C.T.
administration recently demolished
Jabi Arts and Crafts Market, a
market that draws a lot of foreigners
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