1. NIGERIA SME’S & Diaspora Engagement Opportunities & Challenges NIGERIA SME’s – the economic growth engine 1

2. Presentation by Clive Carpenter Vice Chairman and Nigeria Desk Officer Business Council for Africa West & Southern March, 2014 2

3. 3 NIGERIA’s SME’s Vast potential but SME’s not loved by the banks!

4. SME CHARACTERISTICS SME’s across the globe fail to get the attention they SME’s across the globe fail to get the attention they deserve deserve SME’s are the growth engine of any economy – creating a multiplier effect SME’s are the growth engine of any economy – creating a multiplier effect Today’s SME may be tomorrow’s Nestle, Dangote, Diageo or Shell perhaps Today’s SME may be tomorrow’s Nestle, Dangote, Diageo or Shell perhaps SME’s outnumber large established businesses by a huge margin SME’s outnumber large established businesses by a huge margin SME’s collectively employ more people than large established companies SME’s collectively employ more people than large established companies SME’s are often responsible for driving innovation and competition in many economic sectors SME’s are often responsible for driving innovation and competition in many economic sectors SME’s need intensive care and nurturing to take-off on the path to growth and prosperity SME’s need intensive care and nurturing to take-off on the path to growth and prosperity 4

5. SME CHALLENGES Ability to raise finance Ability to raise finance Ability to present financial application in a form acceptable to a lender – i.e. Business Plan, Cash Flow Projections, P&L Forecasts, Budgets, etc. Ability to present financial application in a form acceptable to a lender – i.e. Business Plan, Cash Flow Projections, P&L Forecasts, Budgets, etc. SME promoters are usually entrepreneurs – resourceful people with ideas, willing to take risks, but often poor at translating ideas into clear documentary support SME promoters are usually entrepreneurs – resourceful people with ideas, willing to take risks, but often poor at translating ideas into clear documentary support SME’s are not very profitable for banks and financiers in general, especially in the short-term SME’s are not very profitable for banks and financiers in general, especially in the short-term SME’s require medium to long-term finance SME’s require medium to long-term finance SME’s often need a long moratorium on the repayment of credit facilities SME’s often need a long moratorium on the repayment of credit facilities Borrowing from banks is often not the best method for SME’s to raise finance Borrowing from banks is often not the best method for SME’s to raise finance Many bank staff are not specifically trained in SME finance Many bank staff are not specifically trained in SME finance 5

6. THE ROLE OF THE DIASPORA An understanding of how SME’S have made progress in countries other than Nigeria An understanding of how SME’S have made progress in countries other than Nigeria Can act as mentors to assist with the drafting of Business Plans, Budgets, Cash Flow Forecasts, etc. Can act as mentors to assist with the drafting of Business Plans, Budgets, Cash Flow Forecasts, etc. May be willing to provide seed capital May be willing to provide seed capital Each year, Diaspora remits USA$45 billion back to Africa Each year, Diaspora remits USA$45 billion back to Africa Plays a key role in African development Plays a key role in African development Diaspora drives the transfer of intellectual resource and creative business practices to Africa Diaspora drives the transfer of intellectual resource and creative business practices to Africa Diaspora has unique knowledge of business environment on the Continent Diaspora has unique knowledge of business environment on the Continent Diaspora best equipped to change international community’s perception of Africa Diaspora best equipped to change international community’s perception of Africa 6

7. SOME OPPORTUNITIES FOR SME’S Initiatives by some larger corporates to assist SME’s Initiatives by some larger corporates to assist SME’s Ernst & Young – free consultancy service in some emerging markets Ernst & Young – free consultancy service in some emerging markets Regcharles Finance & Capital Ltd., Lagos Regcharles Finance & Capital Ltd., Lagos AIA’s African Diaspora Fund – invests in SME’s AIA’s African Diaspora Fund – invests in SME’s Jacana Partners – invests in SME’s Jacana Partners – invests in SME’s Nigerian banks more SME focused than previously Nigerian banks more SME focused than previously SMEDAN SMEDAN Bank of Industry Bank of Industry Crowdfunding – Funding Circle Crowdfunding – Funding Circle Invoice financing Invoice financing Venture Capital Trusts Venture Capital Trusts Private equity generally better than debt for SME’s Private equity generally better than debt for SME’s 7

8. Business Council for Africa West & Southern To encourage business in Africa for the benefit of members and the sustainable economic development of the countries of Africa 8

9. Membership Multi-Nationals - Shell, Diageo, PZ Cussons, BAT Multi-Nationals - Shell, Diageo, PZ Cussons, BAT SMEs SMEs Consultants Consultants NGO’s NGO’s All sectors All sectors Over 400 companies and entrepreneurs Over 400 companies and entrepreneurs Linked to the Eastern Africa Association Linked to the Eastern Africa Association Linked to EBCAM Linked to EBCAM 9

10. Membership Benefits Networking – investor briefings & networking Networking – investor briefings & networking lunches - FCO, UKTI & DFID lunches - FCO, UKTI & DFID Influence and Lobbying – Influence and Lobbying – ECOWAS, NEPAD, SADC and at Ambassadorial ECOWAS, NEPAD, SADC and at Ambassadorial and Ministerial level and Ministerial level Discount Opportunities – hotels, airlines, clubs Discount Opportunities – hotels, airlines, clubs Business Intelligence Information Business Intelligence Information Access to African and European Network Access to African and European Network 10

11. Conclusion Network with SME’s that have made it Network with SME’s that have made it NIDO, CANUK, BCA and others have networks that can assist you NIDO, CANUK, BCA and others have networks that can assist you Corruption is a choice, not a necessity Corruption is a choice, not a necessity Remember the risk / reward equation – the greater the risks and challenges, the greater the reward Remember the risk / reward equation – the greater the risks and challenges, the greater the reward No pain – no gain! No pain – no gain! Today’s SME is tomorrow’s Dangote Today’s SME is tomorrow’s Dangote Its who you know more than what you know Its who you know more than what you know Develop a wide network of contacts Develop a wide network of contacts If you are not known how can you be helped? If you are not known how can you be helped? 11

12. A partner in development across Africa Join our network – grow your business www.bcafrica.co.uk 12

13. If you’re not in Nigeria, you’re not in Africa ! 13