The micro, small and medium enterprises (MSMEs) account for a significant portion of the local and national economy. They are crucial in providing employment opportunities for the working population. According to a recent report jointly executed by the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency (SMEDAN), an estimated 37 million MSMEs contributed over 48% to the nation’s GDP, employing over 60 million citizens and contributing over 7% to exports in Q3 of 2017. In other words, Nigeria relies on the MSMEs for almost half of all her economic activities.
Yet, small businesses as emerging brands, are continually on the brink of extinction as they grapple with the difficulties of accessing much needed finance, training, institutional support and promotions to boost their operations and offer more competitive products or services. This has been intensifiedby the country’s slow recovery from the recent economic recession. It is a business environment that has proven difficult for brand building to take root.
But the Lagos State Government in its commitment to strengthen the MSME base in Nigeria’s economic heart-beat, has decided to approach these issues through very calculated measures. As a visionary, the Akinwunmi Ambode led Lagos State Government (LASG) has made small businesses the centre of itsstrategyof becoming Africa’s third largest economy by 2020. In light of this, Mr. Ambode established the Lagos State Employment Trust Fund (LSETF or the ‘Fund’), with the mandate to provide entrepreneurship and employment opportunitites for Lagos residents. At the heart of this initiative is supporting small business to build their brands. By providing access to very affordable financing, capacity building and market exposure to these MSMEs, the Government recognises that these are the businesses that would build stronger operations, create jobs, contribute to the economic prosperity of Lagos State and most importantly, build new brands that can compete in Africa.
To do this, LSETF offers the MSMEs more than access to affordable financing.. The Fund also provides periodic world-class business training for its beneficiaries on how to run an efficient business operation as well as how to turn promising ventures to profitable enterprises. This is in addition to creating free marketing and promotional and brand building platforms for its beneficiaries to connect and engage their consumers.LSETF’s support starts immediately a beneficiary receives an offer letter to access financing.
Last year, the Fund successfully sponsored hundreds of MSMES to trade fairs and exhibitions and continued same tradition in 2018. In May 2018, the LSETF beneficiaries accounted for 25 per cent of the 100 leading vendors and exhibitors at the 2018 edition of the annual Simply Nigerian Fair (SNF) to showcase their various products and services to the purchasing public.
With this support, LSETF has given the needed impetus to over 7,000 new and emerging MSME brands, such as Jand2GIDI, The H&C Bambino Barn, Rele Art Gallery, DEJ Shoes, Scents Of Africa, Happy Coffee, Nubian Roots Company, and Natural Nigerian. Others are Nuts About Cake, Parliamo Bambini, Raw Essence Ltd, Nicnax Granola, and O’Natural Beauty Nigeria Limited, to mention but a few. These efforts have helped to bolster the brand building process for the beneficiary businesses.
Speaking on the opportunity to exhibit at one of the fairs, Mr. Ayodeji Ijaware, who runs DEJ Shoes, an expressive retail fashion brand that specializes in manufacturing and distribution of exquisite fashion items, said his attendance at the fair gave his business the needed positive push. “I heard vendors paid huge sums of monies to attend the fair in order to showcase their products, but I paid nothing to come here all thanks to LSETF. That alone is a very good push from the LSETF because aside the loans, the support to get beneficiaries available for fairs and other exhibitions is part of the needed drive to encourage and grow small businesses,” Ijaware said.
To ensure that thissupport is also felt in the Lagos tech ecosystem which is one of Africa’s fastest growing ones, the LSETF launched, Lagos Innovates, a programme designed to support leading tech founders and startups by facilitating access to: high quality work spaces and infrastructure; hub loan; early stage investment capital; events Sponsorship; investor and peer networks.
Lagos Innovates recently held a security-focused hackathon tagged the “Secure Lagos Hackathon”. The event in partnership with First City Monument Bank (FCMB) and Passion Hub gave innovators the platforms to share their disruptive ideas. The participants pitched diverse innovative ideas, showcasing both software and hardware technology developments that can help tackle security issues in Lagos state. Winners from the three-day innovation driven programme, which had a total of 96 participants, were presented a total sum of N3.15 million in grants. Team ‘LSFLOW’, received N2 million after it emerged the overall best in the pitching contest for its innovative development of an application that can help forecast, monitor and communicate warnings to the relevant authorities about the risk of an eminent flooding in Lagos State. This event received very commendable media coverage to propagate these new and emerging tech innovators.
In furtherance of these objective of upscaling the Lagos MSME brands, LSETF in its understanding that it takes more than access to finance and promotions to help the business achieve the goals, also took it upon itself to push for the needed conducive environment for MSMEs to thrive in the State. By working with the critical and relevant ministries, departments and agencies in the Lagos State Government, the Fund monitors policies and processes that affect how MSMEs do their businesses, with the aim to improvethe policy space by eliminating the challenges that affect business continuityin the State. They also work with other institutions such as Local Governments and Tax Authorities to entangle issues that affects MSMEs.
Already, these interventions are beginning to yield the desired results. A beneficiary of the LSETF, Ogunyemi Olushola Abimbola of H&C Bambino Barn commended the Fund for impacting her business beyond expectations. “We moved from our first location to a bigger location and we now produce close to 200 clothes per month; something we could not do before. This sort of funding by the government for small businesses is critical to achieving the desired economic growth in the country,” she stated.
As evidence of a groundswell impact of LSETF programmes on theMSMEs group and their business performance, a check with the Fund’s beneficiaries shows that they had impressively put about 25,000 people to work in their various businesses. That is unprecedented.
The Fund also features strongly in the frontiers of battling the scourge of employment and employability. Through its Employability Support Project in partnership with the United Nations Development Programme (UNDP), LSETF is poised to train and provide job placements for over 10,000 young Lagos residents. This project has already produced over 2,000 trained graduates ready to be deployed in their chosen trades across the Manufacturing, Construction, Garment-Making, Hospitality, Entertainment and Healthcare sectors.
Recently, the Dangote Group and its partner vendors interviewed about 350 graduate trainees from the programme in the Construction and Manufacturing sector, with the aim of employing them. Other organizations and corporates who have shown confidence in the trainees include Construction Kaizer, Crown Nature Plc, Whispering Palms, Fahrenheit Hospitality and Summit Chanrai Group, a resounding testament to the quality of the trainees and the project itself.
In his remarks on the milestones achieved by the LSETF thus far, the Executive Secretary/CEO of the Fund, Mr. Akintunde Oyebode said: “I am very pleased that the LSETF loan programmes are not only benefiting the businesses of the recipients but that they are also impacting value creation in critical economic sectors such as the ICT, Retail, Agriculture, Manufacturing, Fashion, Arts, Media & Entertainment, Education, Health, Food & Hospitality, Transport & Logistics. We are confident thatthe robust investment activities across these sectors will deepen performance, profitability and job creations in the short, middle and long terms.
“I am also proud that we have done this through a very open, transparent, professional and unbiased process that has ensured that every Lagos resident, irrespective of their tribe, gender, age, religious or political affiliations, get the same opportunities to access our programmes to position them to create wealth and employment in the state. This step is in alignment with our core values of integrity and inclusivityto ensure that no one is left behind”.
The Lagos State Employment Trust Fund (“LSETF”), was established by The Lagos State Employment Trust Fund Law 2016 to inspire the creative and innovative energies of all Lagos residents by providing access to financial and institutional support to enterprises and by building capacity for unemployed youths for wealth and employment creation.