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Using Movable Assets To Secure Loans In Nigeria. What Startups Need To Know

July 11, 2019

Startups in Nigeria who do not have landed property but movable assets as securities for loans now have an alternative. Following the passage of Secured Transactions in Movable Assets Act into law, owners of small businesses can now borrow from banks and other financial institutions, even though they do not have any lands or buildings. All they need to do is to first register the movable assets such as cars, or any property of worth (which property is not land or building or fixed property) with the National Collateral Registry.

This Is How It Works Under The Secured Transactions in Movable Assets Act

This law allows small, medium business owners or startups to create security interests in respect of both their present and future movable assets.
Movable collateral under the Collateral Registry Regulation includes equipment, inventory, accounts receivable, household items, bank accounts, farm products, motor vehicles, boats, planes, consumer goods, trees that have been severed and oil, gas or minerals that have been extracted, etc.
You can register your interest over such assets as you do when you want to perfect titles to land at the Land Registry.
In this case, all that is required is that you take steps to perfect the interests in that asset.
The law has created a National Collateral Registry where you can now perfect the assets.
An asset is deemed perfected when a financial statement in respect of such a security interest has been registered with the National Collateral Registry.
The registered financial statement is valid until the expiration of the terms specified in the financial statement.
The creditor who registers the Financial Statement is issued with a confirmation statement by the registrar.
Where two security interests have been perfected in respect of the same asset, the first to be registered would rank first.
Using the confirmation statement and other documents, you may then apply for loans at a bank in Nigeria under the National Collateral Registry Scheme or the Secured Transactions in Movable Assets Act

Why This Is So Different From Normal Collateral Requirements From Banks

Previously, before the passage of the Secured Transactions in Movable Assets Act, small and medium scale businesses in Nigeria were often required to present their landed property or buildings (which they hardly had) in order to procure a loan.

Now, persons who have movable assets in Nigeria such as equipment, inventory, accounts receivable, household items, bank accounts, farm products, motor vehicles, boats, planes, consumer goods, trees that have been severed and oil, gas or minerals that have been extracted can now borrow loans from banks without landed property being demanded as collateral. All they need to do is to register the asset with the National Collateral Registry in order to create security interests over the assets.

Registration will remain in the Collateral Registry until the expiration of the term indicated in the financing statement, or until the registration is canceled (discharged). The period of registration does not, however, need to be the same as the duration of the loan, as there may be an expectation between the debtor and secured creditor that the loan will be renewed. Six months after the expiration of a registration, it shall cease to be publicly searchable and will be moved to an archive, from which it can be retrieved only by the Collateral Registry staff.

Where the debtor fails to pay back the loan, the secured creditor has a right to enforce its security interest in the collateral.

Key Things To Have In Mind About The Secured Movable Assets In Question

With this law, individuals in Nigeria may apply for a loan as a group. They may use their assets that they own individually or jointly as collateral for the loan.
Using immovable property, such as land or building carries certain unwanted risks for the debtor. It is therefore reasonable that a debtor will be more comfortable with losing equipment or other movable property than with losing a house in case of a default.
Currently, it costs N1000 for the registrations of initial financing statements, and N500 for renewal or amendment. However, these fees may change from time to time, so it is recommended that you check the Collateral Registry website for the up-to-date information.
Under the Collateral Registry Regulation, the secured creditor may enforce its security interest by taking possession of the collateral or rendering the collateral inoperative. Subsequently, it may dispose of the collateral through a sale. The Collateral Registry Regulation permits the secured creditor to proceed extra-judicially without having to obtain a court order before repossessing the collateral. The secured creditor may also choose to apply to the court to authorize enforcement.
Where the proceeds of the sale of the secured assets are insufficient to satisfy the loan, the debtor will be liable for the shortfall. The secured creditor has a right to obtain the balance from the debtor directly or may proceed against other assets of the debtor. The secured creditor may initiate legal action against the debtor for the balance and get a judgment for the amount owed. It may also choose not to take legal action against the debtor and just write off the loss on the loan.

Are Secured Transactions In Movable Assets Already Taking Place?

To a large extent. The Central Bank of Nigeria (CBN) recently disclosed that the National Collateral Registry has assisted over 154,000 Micro, Small and Medium Enterprises (MSMEs) to access N1.2 trillion loans from 628 financial institutions.

The report showed that the number of MSMEs in Nigeria that have used their movable assets to obtain loans from financial institutions through the NCR rose to 154,827 as at December 19, 2018, from 100,049 in the first year, 2017, indicating the increase of 54 percent. The report also showed that 22,251 of the MSMEs were female entrepreneurs. Further breakdown showed that 146,777 of the borrowers were individuals, 3,416 were micro businesses, 2,169 were medium businesses, 1,777 were small businesses and 687 were large businesses.

The number of participating Deposit Money Banks (DMBs) rose to 21 from three in 2017, microfinance banks rose to 551 from 96, Development finance institution rose to four (4) from one(1), merchant banks rose four from one, finance companies rose to 13 from 2 while non interest bank rose to one from zero in 2017.

Click the NCRN User Manual to download a PDF Format of the User Training Manual.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

3 Million Kenyans Living Abroad Sent More Money Home Than The Whole Of East Africa

Kenyans living abroad are sending more money back home than their counterparts living in Uganda, Tanzania, Rwanda, Burundi, South Sudan, and Ethiopia put together. World Bank data says Kenya’s Diaspora remittances in 2018 stood at Sh280 billion (about $2.7 billion), while a total of Sh242 billion was sent to the rest of Eastern Africa — comprising Uganda, Tanzania, Rwanda, Burundi, South Sudan, and Ethiopia.

However, this does not stop there. In the first five months of 2019, Kenyan Diaspora remittances stood at Sh118.9 billion, a 3.8 percent increase in the same period in 2018.

Here Are The Facts

A World Bank unit known as the Global Knowledge Partnership on Migration and Development prepared the report released in April 2019.
With these figures, remittances in Kenya have now become the biggest source of foreign exchange for Kenya, far more than Kenya’s tourism, tea, coffee and horticulture exports.
With these figures again, it means that in terms of contribution of remittances to the GDP of a country, Kenya’s now stands at (three percent), Uganda (4.5 percent) and Rwanda (2.4 percent) in the region, while Ethiopia saw the least contribution (0.5 percent) and Tanzania (0.8 percent).
This report is significant because it shows that between 2017 and 2018, the rate at which Kenyans sent money back home grew by 39%. The rate has even further increased in the first five months of 2019. Between January and May 2019, a total of Sh118.9 billion, representing a 3.8 percent increase on the same period in 2018, was sent back to Kenya

Where The Money Is Coming From

The money came from about 3 million Kenyans living abroad, many of whom have attained tertiary education and are working in the formal sector jobs.
North America, particularly the United States accounts for much of the Kenyans abroad remittances. At least, 45 percent of all the remittances came from that region. This is followed by Europe at about 23 percent while the rest of the world accounts for about 32 percent.
The US is a popular destination for Kenyans looking for greener pastures and further education, with the latter mostly remaining in the destination countries for work after graduation.
In recent years, however, the Middle East and China are also emerging as a choice destination for those looking for external work opportunities, in line with the rapid economic growth in these regions.

Why So Much Is Being Sent Back Home

Perhaps Kenyans are sending more back home because it has become easier to do so.
The Central Bank of Kenya has, for instance, identified the ease of sending money back home as a major factor in the sharp growth of Kenyans abroad remittances.
Local banks have entered partnerships with remittance service providers that allow them to handle larger volumes of inflows.
The expansion of the popular M-Pesa service beyond Kenya’s borders is also helping, with direct cash transfers on mobile making it easier for the millions who actively use mobile money to receive money instantly from relative abroad.
One of the biggest impediments to inward African remittances has over the years been identified as cost, partly attributable to the lower than global average penetration of formal banking in the continent.
The World Bank report shows that remittances to sub-Saharan Africa remain the most expensive across the different regions of the world.

“The cost was the lowest in South Asia, at five percent, while sub-Saharan Africa continued to have the highest average cost, at 9.3 percent.

“Remittance costs across many African corridors and small islands in the Pacific remain above 10 percent,” said the World Bank in the report.

It also helps if a country has a well-developed banking sector, which opens up formal channels of remitting money back home and reduces the cost of doing so.
Ease of movement of capital also helps. Countries that do not restrict the movement of hard currency are, therefore, likelier to attract foreign investment flows, which encourage the setting up of more robust support infrastructure for remitting money.

Kenya Is Fifth On the Continent As A Whole

Looking at the wide continent, Kenya was fifth last year in terms of volume of money remitted.

Egypt and Nigeria, which are two of Africa’s most populous countries and boast of a large diaspora, led the continent with inflows of Sh2.98 trillion ($28.9 billion) and Sh2.5 trillion ($24.3 billion) respectively last year.
Morocco and Ghana saw remittances of Sh760 billion (7.38 billion) and Sh391.4 billion ($3.8 billion) respectively to also come in ahead of Kenya on the list.
In East Africa, remittances stood at Sh128.4 billion for Uganda, Sh44.3 billion for Tanzania, and Sh42.4 billion in Ethiopia. Rwanda and Burundi had remittances worth Sh23.7 billion and Sh3.7 billion respectively, while there was no data available for South Sudan and Somalia for 2018 in the World Bank report.

“Remittances to sub-Saharan Africa were estimated to grow by 9.6 percent from $42 billion in 2017 to $46 billion in 2018. Projections indicate that remittances to the region will keep increasing but at a lower rate, to $48 billion by 2019 and to $51 billion by 2020,” World Bank noted in the report.

“The upward trend observed since 2016 is explained by strong economic conditions in the high-income economies where many sub-Saharan African migrants earn their income.’’

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Over $40 billion in Trade Deals, Participants From 55 Countries Expected at Intra African Trade Fair 2020 in Kigali

Organizers of the Second Intra-African Trade Fair (IATF2020) have promised that it will surpass the achievements of the inaugural trade fair held in Cairo in 2018 by attracting 10,000 participants and generating intra-African trade and investment deals worth more than $40 billion. This was made known by Prof. Benedict Oramah, President of the African Export-Import Bank (Afreximbank).

Prof. Oramah was speaking at the formal launch of IATF2020 during the African Continental Free Trade Area (AfCFTA) Business Forum 2019 held on the sidelines of the 12th Extraordinary Summit of African Union (AU) Heads of State in Niamey, Niger.

He told guests that the trade fair, scheduled for Kigali from 1 to 7 September 2020, would attract more than 1,100 exhibitors from over 55 countries.

“Working with our esteemed partners, we will exceed the achievements of 2018,” he said, describing IATF2018 as a resounding success, not in the colourful displays exhibited, but in the showcasing of diversity of tradable goods by about 1,100 exhibitors from 45 countries and in the execution of deals worth about $32 billion.

That trade fair resulted in a Nigerian technology company winning a $100-million contract to provide technology-based solutions to the South Sudanese government; an Egyptian company winning contracts in many African countries to supply and install energy generation and distribution equipment worth close to $1 billion; Egyptian and Tunisian companies signing a $50-million partnership deal to create a joint venture for assembling home appliances; and the signing of a $3-billion energy generation project between an Egyptian company and an African government, the largest-ever intra-African project executed exclusively by African entities, including financial institutions, he noted.

“The momentum created by the maiden IATF and the historic launch of the African Continental Free Trade Area (AfCFTA) will sustain the growth of cross-border trade and investments,” he affirmed.

Also speaking, Amb. Albert Muchanga, the AU Commissioner for Trade and Industry, said that the IATF was one of a set of activities planned by the African Union Commission to support the implementation of the AfCFTA. The others included the African Trade Observatory, a portal for real-time information on business opportunities.

Soraya Hakuziyaremye, Minister of Trade and Industry of Rwanda, said that it was important for the African private sector to take advantage of IATF2020 to present and exchange their products and for entrepreneurs to use it to boost their visibility.

The Second Intra-Africa Trade Fair (IATF2020), which will take place in Kigali from 1-7 September 2020, is expected to attract more than 1,100 exhibitors from 55 countries and to provide a platform for sharing trade, investment and market information. It will enable buyers and sellers, investors and countries to meet, discuss and conclude business deals as well as provide an opportunity for exhibitors to showcase their goods and services and to engage in business-to-business exchanges.

The key features include an IATF2020 Conference, a Creative Africa initiative, which will showcase Africa’s creative economy, Country Days dedicated to specific African countries, and an interactive online Virtual Trade Fair.

IATF2020 is being organized by Afreximbank, in collaboration with the African Union, and is hosted by the Government of Rwanda. The event partners are the African Development Bank, United Nations Economic Commission for Africa represented by the Africa Trade Policy Centre; Afrochampions Initiative; Pan African Chamber of Commerce and Industry; World Trade Centre Miami; Export Development Authority of Egypt; and International Islamic Trade Finance Corporation.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

Facebook: https://web.facebook.com/Afrikanheroes/

EurAfrican Forum 2019 Ends on High Note

The second edition of the EurAfrican Forum 2019 that attracted over 450 participants from Europe and Africa with the theme “Partnership of Equals: Sharing Values, Sharing Prosperity” ended in Lisbon, Portugal over the week. The event which focused on creating a new approach and paradigm for the relationship between Europe and Africa, changing the narrative for both continents to create an accountable, prosperous and sustainable future together was a resounding success, say the organizers.

During the two day event, many relevant topics were brought to discussion: i) African entrepreneurs driving inclusive innovation and growth; ii) From donor-recipient towards equal participation; iii) Changing the narrative: valuing talent and diversity from migrant flows; iv) Africa: the new frontier for impact investment and innovation and v) Legacy to growth: rehabilitating the heritage, culture and tourism.

Also, four parallel breakout sessions deepened related topics, namely: rebuilding Mozambique; security, migration and talent; tools and strategies for women and youth empowerment; and EU-AF economic integration and digital infrastructure for Africa.

With contributions from over 40 international speakers, the Forum had the participation of 450 participants, from 17 European countries and 24 African countries, including the participation of His Excellency, the President of the Republic of Mozambique, Filipe Nyusi, and His Excellency, the President the Portuguese Republic, Marcelo Rebelo de Sousa.

The EurAfrican Forum is a networking and discussion platform underpinned on the power of Diasporas for connecting people, cities, regions and continents, gathering prominent and influential people that are forging enduring ties between the two continents – government officials, high profile business personalities, investors, young entrepreneurs, activists, social influencers, NGOs and media.

Hosted by the Portuguese Diaspora Council and the Municipality of Cascais, with the High Patronage of the Presidency of the President of the Portuguese Republic and the Government of Portugal, the EurAfrican Forum is led by José Manuel Durão Barroso (Chairman of the EurAfrican Forum and former President of the European Commission / former Prime Minister of Portugal) and Filipe de Botton (Chairman of the Board of Directors of the Portuguese Diaspora Council)

“The mission of the Portuguese Diaspora Council was until today to help Portugal. We think today we should go to the next step: to motivate the African countries to create their own Diaspora Councils.” so says Filipe de Botton, President of the Board of the Portuguese Diaspora Council

In his own words, the Deputy Mayor of Cascais, Miguel Pinto Luz said that sharing is actually the keyword (…) I believe in healthy competition between companies, and even between countries, but above all, I believe in people cooperating and sharing.

Koen Doens, Directorate-General for International Cooperation and Development, European Commission noted that there’s a lot of activity happening in Africa. 80% of young people want to be entrepreneurs. If we look at the dynamism of what is happening – in agritech, in fintech, in lots of issues, even in social entrepreneurship – I mean, this is incredibly important, and that is where Europe and Africa need to link up.

Explaining the importance of connecting, the Botswana Satirist Siyanda Mohutsiwa said that “we are more alike than we are different. (…) A shared imagination is one in which a collection of people from different backgrounds, who have different lived experiences, have different perspectives and ways of thinking, come together to create delusions collaboratively.

The modern world is filled unfortunately with the singular genius narrative. (…) A shared imagination is behind some of society’s greatest achievements: technology, space travel, and political ideas continue to be driven by groups of people who have the courage and faith in each other to come together and answer the question: what if…?”

On the need to address the issue of migration, Antonio Vitorino of the International Organization of Migration (IOM) said that there are two pre-requisites when it comes to the migration dialogue between Europe and Africa. The first one is building mutual trust and the second one is to have a sense of shared responsibilities between Europeans and Africans when it comes to managing migratory flows.

The next event comes up in 2020.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

Facebook: https://web.facebook.com/Afrikanheroes/

Channel VAS is Fintech Sponsor Of Mobile 360 Africa

July 10, 2019

As part of efforts aimed at deepening fintech penetration across Africa, Channel VAS, the global premium fintech, and data analytics company, is happy to support the Mobile 360 Africa event, holding the position of Fintech Sponsor in this prestigious event that is taking place July 16-18 in Kigali, Rwanda.

With most of the Channel VAS’ 30-plus countries of operation being in the African region, events like Mobile 360 Africa, which is part of the GSMA Series of global events are a prime opportunity for the company to network with key players in the mobile industry and showcase its innovative ideas, aiming to improve people’s financial inclusion in underserved and underbanked areas of the continent.

According to Mr. Bassim Haidar, Channel VAS’ founder and CEO, of Channel VAS “as a global leader in the Fintech field, Channel VAS is always keen on supporting major events like the M360 Africa, which promotes inspirational and disruptive ideas, like the services we offer, to shape the continent’s mobile and digital future. With the Channel VASvision being the financial inclusion of unbanked populations in Africa, coming closer to other major players in the mobile ecosystem to work together towards that goal is facilitated through events, likeM360 Africa.”

“Mobile 360 Series – Africa aims to showcase how mobile connectivity is providing a foundation for innovation and entrepreneurship across the region, delivering a range of essential services across finance, healthcare, and digital identity,” said Akinwale Goodluck, Head of Sub-Saharan Africa, GSMA. “We are looking forward to welcoming our speakers, guests, and sponsors in Rwanda next week and discussing the positive and transformational impact mobile is having throughout this incredible region.”

A delegation of Channel VAS executives will be attending the event and will have important meetings with some of the region’s major businesses, aiming to expand the delivery of the company’s services towards financial inclusion to more countries and people in the region.

Channel VAS is offering Airtime Credit and Data Credit Services, as well as other innovative Mobile Finance and fintech services in over 30 countries worldwide, covering most of West Africa, South, and East Africa as well as several Middle Eastern and Asian countries. The company’s expansion is supported by a strong portfolio of proprietary intellectual properties on the products and tools offered to MNOs and businesses across the globe.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

Facebook: https://web.facebook.com/Afrikanheroes/

ECO: As West Africa Takes the Single Currency Plunge

Analysts have started exploring opportunities inherent in the proposed single currency for the West African region; The Eco. It could be recalled that leaders of the 15 member states of the Economic Community of West African States (ECOWAS) met in Abuja, Nigeria, and formally agreed on the name of the planned common currency the “ECO” The currency according to a release from ECOWAS Secretariat Abuja, would be based on a flexible exchange rate regime, coupled with a monetary policy framework focused on tackling inflation.

Observers say there seems to be a sense of urgency in this latest efforts, maybe being buoyed by the recently signed Africa Continental Free Trade Agreement (AfCTA). This is because the target launch date for Eco has been postponed several times; in 2005, 2010 and 2014; since the concept first arose in 2003. Now the Economic Community of West African States (ECOWAS) is planning to launch the currency in 2020, with member states agreeing to name it the ‘ECO’ there seem to be a new sense of urgency.

Reports indicate that governments in the region are keen on more integration and a single currency will facilitate trade, lower transaction costs, and payments amongst ECOWAS’ 385 million people.

Currently, eight of ECOWAS countries i.e. Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo jointly use the CFA franc while the remaining six members have their own independent currencies.

Some analysts are of the view that the single currency if properly implemented will improve trade by allowing specific countries to specialize at what they are good at, and exchange it for other goods that other countries in the bloc produce more efficiently.”

A report by the African Development Bank Group (Afdb) indicates that the 2020 deadline for the single currency will most like be postponed again unless the region can align with its monetary and fiscal policies.

Countries are required to meet a ten convergence criteria, set out by the West African Monetary Institute (WAMI), by the 2020 deadline. The primary four beings: a budget deficit of not more than 3%, an average annual inflation rate of less than 10%, Central Bank financing of budget deficits should be no more than 10% of the previous year’s tax revenue and gross external reserves worth at least three months of imports.

The six secondary criteria to be achieved by each member country are: Prohibition of new domestic default payments and liquidation of existing ones, tax revenue should be equal to or greater than 20 percent of the GDP, wage bill to tax revenue equal to or less than 35 percent, public investment to tax revenue equal to or greater than 20 percent, a stable real exchange rate and a positive real interest rate.

However, reports indicate that although countries may meet the criterion by the deadline they fall behind thereafter thus posing the main difficulty in inconsistencies.

As at today, only five countries, viz; Cape Verde, Ivory Coast, Guinea, Senegal and Togo of the region’s fifteen countries currently meet the single currency’s criteria of a budget deficit not higher than 4% and inflation rates of not more than 5%, as noted by Charlie Robertson, chief global economist at Renaissance Capital.

Additionally, while ECOWAS says the integration will be gradual as countries meet the criteria, it’s unlikely that a 2020 launch date is feasible as there is no significant progress in the design, production, and testing of the currency notes.

Given that various economies in the region are at “dramatically different levels of development,” the leadership of ECOWAS is being unrealistic in both its timing for the currency’s launch and expectations of what it might achieve, Robertson says. “You’ve got very different levels of debt, interest rates, and budget deficits. Trying to align these countries to operate as one is extremely difficult,” he says. “What currency policy is right for two such divergent countries like saying Ghana and Burkina Faso?”

There is also the glaring disparity in the economic size of Nigeria in the region. For example, Nigeria is 67% of ECOWAS’ GDP, so really this isn’t a single currency for 15 countries, this is the Nigerian Naira plus a few countries.

How the leaders hope to close all these gaps between now and next year remains to be seen.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

Facebook: https://web.facebook.com/Afrikanheroes/

Printronix announces partnership with Tri-Continental to Cover Central, East and West Africa

Printronix, a global pioneer of line matrix technology, has recently signed a distribution agreement with Tri-Continental Ltd.

Under the agreement, Tri-Continental, one of the largest and most prominent IT distributors in the African market, will distribute Printronix and TallyGenicom line matrix printers as well as its desktop serial dot matrix models, the S809 and S828. Through this partnership, Tri-Continental and Printronix will broaden their reseller base and strengthen their presence and market penetration in this important region.

Based in West London, Tri-Continental has expanded its operation to span 36 countries in Central, East and West Africa, and has been IBM’s strongest performing channel partner there for almost 30 years. The company has a strong reputation for providing the right solutions for its customers and adding value to the supply chain. It has been working with global brands such as IBM, NetApp, Epson, and Canon.

Joseph Musisi, Tri-Continental Director and General Manager, says he is confident that the expanding range of reliable quality printers from Printronix is ideal for Africa’s many applications, its demanding environments, and multiple vertical markets. “Printronix is well known for its reliable quality printers. The devices are globally recognized for their unrivaled performance in mission-critical applications where downtime is not an option and cost-effectiveness is a priority. Printronix is a trusted supplier with a long list of high profile global customers, many of whom have a presence in Africa. We can add new local customers to that list, as well as expand the usage of Printronix printers across all the countries where we are present,” explains Joseph.

With over 40 years of success to build on, Printronix offers a wide range of printing solutions and applications for various industries, as well as ongoing support, sales training, and service to its channel partners. Regional Sales Manager for Sub-Sahara and South Africa at Printronix, Lareen Kohler says: “Tri-Continental is firmly positioned as a leading Pan-African distributor of world-class technology products, and, as an additional partner in the region, it will help us expand our channel base and reach end customers in Africa that we are not currently engaged with. This is an important market for Printronix so Tri-Continental is an ideal choice to contribute to our business growth plans for the region.”

Rosemarie Zito, Printronix Vice-President of EMEA Sales & Marketing, adds: “Printronix is looking forward to working with Tri-Continental. Its team has a great track record for building reseller channels throughout Africa, which will greatly support our solutions.

Printronix is the OEM supplier of former IBM 6400 and 6500 line printers and, as such, we are partnering with Tri-Continental as it has such extensive knowledge of the corporate IBM customers in the region. We are sure that Tri-Continental will help us better serve them and upgrade legacy line and serial dot matrix printers. In addition, we believe Tri-Continental is complementary to our existing distribution channel in the region.”

The Printronix P8000 and TallyGenicom 6800 line matrix series with Pedestal, Zero Tear and Enclosed Cabinet models, and the S809/S828 serial dot matrix printers deliver flexible design, adaptable functionality, and manageable savings.

Line and serial dot matrix printers are designed for users in manufacturing, distribution and logistics, government, banking, and food & beverage. They can be used to print invoices, shipment, and transportation documentation, bank and customer statements, and product labels. Users can expect maximum uptime, low cost of ownership, and maximum reliability in demanding environments.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

Facebook: https://web.facebook.com/Afrikanheroes/

Here Is Why Startups In Nigeria Can’t Crowdfund Yet

Looking to raise capital for your startup through equity crowdfunding in Nigeria? No loans? Just some hard currency from some money messiahs? That is what South African businesses are turning to now. Intergreatme has recently succeeded in raising over R32.7 million ($2.2 million) by simply putting up an online request for equity funding on Uprise.Africa and getting overwhelmed by public contributions.

Good day for South African businesses, bad day for their Nigerian counterparts. This is because there are still so many issues surrounding equity crowdfunding in Nigeria. Below, we discuss the legal implications of crowdfunding in Nigeria more intensely.

Crowdfunding sometimes appears the only alternative for start-ups, in the face of stifling interest rates on loans from banks and financial institutions, and lack of funds from family and friends as well as the absence of venture capitalists and angel investors. Crowdfunding is a way of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet. Here is a quick grasp of reality.

The United States

The United States’ Securities and Exchange Commission has made a lot of rules on Crowdfunding which will enable eligible companies to offer and sell securities through crowdfunding. Thus in the US, all transactions under Regulation Crowdfunding take place online through an SEC-registered intermediary, either a broker-dealer or a funding portal. A company is to raise up to a maximum aggregate amount of $1,070,000 through crowdfunding offerings in a 12-month period. However, there is a limit on the amount individual investors can invest across all crowdfunding offerings in a 12-month period. Securities purchased in a crowdfunding transaction generally cannot be resold for one year.

South Africa.

There is no substantial legislation on crowdfunding in South Africa, except that equity crowdfunding is a form of securities. However, South’s Africa’s first equity crowdfunding platform Uprise.Africa was launched after being told by the Financial Services Board (FSB) that the platform does not fall foul of the Collective Investment Schemes Act, the platform’s founder and COO Patrick Schofield said. Inge Prins, the Chief Marketing Officer Uprise.Africa, had hinted the platform, in one of its numerous success instances, paid out investment funds to a local brewery, Drifter Brewery following a successful campaign that raised R3,889,000 (US$293,000), far exceeding its stated goal by almost R1,000,000.

Understanding How Crowdfunding Works

Crowdfunding refers to raising money from the public (who collectively form the “crowd”) primarily through online forums and social media.

Crowdfunding models include: Donation-based crowdfunding (in which donors are not typically granted anything in return for their donation)

Rewards-based crowdfunding (in which backers contribute funds in exchange for some reward–in many cases the item produced by the campaign)

Equity crowdfunding (Equity crowdfunding refers to raising money from small public investors (who collectively form the “crowd”) primarily through online forums and social media. In exchange for relatively small amounts of cash, investors get a proportionate slice of equity in a business venture).

Debt/lending crowdfunding (in which lenders provide money and expect their loan to be paid back with interest).

Crowdfunding For Private Companies Cannot Work Unless Nigeria’s Companies And Allied Matters Act (Nigeria’s Chief Company Legislation) Is Amended.

The idea of having crowdfunding for companies is that the general public would be allowed to contribute towards the formation of the companies. Now while the public can contribute to an idea, the same is not possible for a company. By section 22(5) of Nigeria’s CAMA, it is impossible for a private company to invite the members of the public to subscribe to its shares. It is also impossible for equity crowdfunding to work because the idea of equity crowdfunding is that the public funds the formation of the company expecting to be repaid their contributions by way of shares in the company.

Image result for Crowdfunding Value

Again, under Section 22 of CAMA, the maximum number of persons a private company shall have shall not exceed fifty, not including persons who are bona fide in the employment of the company.

Nigeria’s Securities and Exchange Commission and Crowdfunding

The Commission determines governs all company securities in Nigeria. Section 13 of the Investment and Securities Act (the chief Act that regulates securities of companies in Nigeria) empowers the Commission to:

regulate all offers of securities by public companies and entities;
register securities of public companies;
prepare adequate guidelines …necessary for the establishment of securities exchanges and capital trade points.
register and regulate the workings of venture capital funds and collective investments schemes in whatever form;

Consequently, by Section 67(1) of the Act, no person shall make any invitation to the public to acquire or dispose of any securities of a body corporate or to deposit money with anybody corporate for a fixed period or payable at call, whether bearing or not bearing interest unless the body corporate concerned is-(a) a public company, whether quoted or unquoted, and the relevant provisions of Act are duly complied with.

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To this effect, the SEC, which was empowered to do so, has gone ahead to give the listing requirements for any company in Nigeria to include that the company must be registered as a public limited company with no restrictions on the transfer of fully paid shares; have a minimum of three (3) years operating track record; have a pre-tax profit from continuing operation of not less than N300million cumulatively for the last three (3) fiscal years and a minimum of N100 million in two (2) of these years. Hence, since equity crowdfunding is ideally a thing for new, mostly private companies limited by shares, there is no way any of them would be able to fulfill the listing requirements, to be able to offer their securities to the public.

The continued ban on equity crowdfunding in Nigeria by SEC, therefore, is not a surprise, even though the Commission said it is looking at the crowdfunding rules in the US and Canada.

The SEC believes that crowdfunding cannot be effective in Nigeria in the meantime because of a lack of rules.

Bottom Line

While equity crowdfunding remains banned in Nigeria, donation and reward-based crowdfunding are however excluded from the SEC’s regulatory remit. This explains why there are a number of donation crowdfunding platforms, and not one for equity crowdfunding. Nigeria’s first equity-based crowdfunding platform, Malaik, launched in 2015 is now down and is up for sale at $3795 on HugeDomains.com, while other donation-based platforms such as Donate-ng.com, and Imeela have since carried on.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Opera Founded Startup OPay Raises $50M For Mobile Finance in Nigeria

OPay is just a year old in Nigeria, but the startup is already making waves. Nigerian road users would be familiar with the green livery motorbike hailing startup ORide, which is a part of the OPay business. Founded by Norwegian browser company Opera, OPay, the Africa-focused mobile payments startup has raised $50 million in new funding.

A Look At The Funding

A large chunk of the investment came from investors including Sequoia China, IDG Capital, and Source Code Capital. Opera also joined the round in the payments venture it created.
OPay intends to use the capital (which wasn’t given a stage designation) primarily to grow its digital finance business in Nigeria — Africa’s most populous nation and largest economy.
OPay will also support Opera’s growing commercial network in Nigeria, including its motorcycle ride-hail app ORide and OFood delivery service.
Opera founded Opay in 2018 on the popularity of its internet search engine. Opera’s web-browser has ranked number two in usage in Africa, after Chrome, the last four years.

The Startup’s Statistics

On the payments side, OPay in Nigeria has scaled to 40,000 active agents and $5 million in transaction volume in 10 months.
The $50 million investment in OPay is more than just another big round in Africa. It has significance for the continent’s tech-ecosystem on multiple levels.
To start, OPay’s raise tracks greater influence in African tech from China — whose engagement with African startups has been light compared to China’s deal-making on infrastructure and commodities. OPay founder Opera was acquired in 2016 for $600 million by a consortium of Chinese investors, led by current Opera CEO Yahui Zhou.
The majority of the investment for OPay’s raise comes from Chinese funds and sources, including Source Code Capital, Sequoia China, and GSR Ventures. There’s not a lot of statistical data on the value of Chinese VC investment in Africa, but a large portion of $50 million to a fintech venture stands out.

This New Investment May Mean A Major Shift For Nigerian Digital Payments Startups

OPay’s VC haul also has significance vis-a-vis digital-finance in Nigeria. In tandem with other trends, it could support the shift of Nigeria surpassing Kenya as Africa’s digital payments leader. For years Kenya has outpaced Nigeria in P2P digital payments volumes and digital financial inclusion, largely due to the rapid adoption of mobile-money products, such as Safaricom’s M-Pesa.
Some of this is due in part to Nigeria’s Central Bank limiting the ability of non-banks (including telcos) to offer mobile payment services. The CBN eased many of those restrictions earlier this year. This opens the door for mobile-operators like MTN, with the largest phone network in Nigeria, to offer mobile-money products. In addition to fintech regulatory improvements, there’s been a gradual increase in VC flowing to Nigerian payment ventures.
The country’s leading digital payment company, Paga, raised $10 million in 2018 to further expand its customer base that now tallies 13 million. OPay’s $50 million backed commitment to grow mobile money in Nigeria should provide another big boost to digital-finance adoption across the country’s 190 million people.
And not to be overlooked is how OPay’s capital raise moves Opera toward becoming a multi-service commercial internet platform in Africa. Part of the $50 million investment includes diversifying country and product offerings. “Geographic expansion of OPay and other services is a key part of our plans,” Opera CEO Yahui Zhou told TechCrunch via email.

This could place OPay and its Opera supported the suite of products on a competitive footing with other ride-hail, food-delivery, and payments startups across the continent. It could also mean competition between Opera and Africa’s largest multi-service internet company, e-commerce unicorn Jumia.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

What Startups Can Do To Remain Profitable

Startups who raise funds have to work really hard to justify each of the equity investment that flows into their businesses. One thing is to be surrounded by funds, another thing is to use the funds to run a profitable business. Knowing the best ways to stay afloat in tough times by making profit could be the only lifeline that saves you and your business. Below, we discuss various tested ways of remaining profitable.

Why Does Profitability Matter If You Are Already Passionate?

The owner of Nigeria’s irokoTV believes profitability is important but equally very important is cash flow.

‘‘Revenue is vanity. Profits are sanity. Cashflow is King. A lack of profits is like cancer. It will kill you slowly. A lack of cash flow is like a heart attack. You die there and then. As the bank empties. So does your dreams of startup Nirvana,’’ he says. ‘‘ Profits. There are various versions of this. You can be very ‘profitable’ and still need money to operate your organisation day-to-day. Cash flow positivity is more important.’’

According to Steven Hess a trustee and program lead at global entrepreneur network The Startup Leadership Program, ‘‘for a business to be sustainable, it must ultimately make a profit at the operating level, otherwise, it’s just a house of cards. Maybe you need a critical mass of customers to achieve supply-side economics, but it’s still a path to profit that increasingly is growing in importance.”

At What Stage Does Your Startup Really Need The Profit?

Knowing his would not only save you the stress of anxiety associated with returning an unprofitable business but will help your startup endure, gain traction and succeed with time. Jason Njoku, Nigeria’s co-founder of IrokoTV says most companies in the growth stage are unprofitable.

‘‘That’s by design,’’ he says. ‘‘It’s the way the VC-backed system works. It attempts to accelerate everything, which leads to mistakes, which leads to money wasted. That’s the downside. On the plus side, it leads to unnatural growth. Like the viral kind. Something which would ordinarily take 10 years is accelerated to 4–5 years in the VC system. The aim is to build big companies. When I mean big. I mean $100m in revenue per year big. That takes bucket loads of capital. iROKO 2011 (pre-VC) — profitable. 2012 — today (post-VC — unprofitable by design.) 2016 and beyond — we aim for cashflow positivity (not necessarily profitability).

Njoku says when startups invest for growth, it’s rarely possible in consumer or enterprise internet to do that profitably.

‘‘Building a core team, building out engineering, customer acquisition, support, brand — very few (~1–2%) major consumer internet companies managed it over the last 20 years (the history of the internet). Of the largest ones we know today, 0% were profitable in the first 5 years+. You lose a bunch of money. Until you don’t. In Nigeria, at a relatively low scale, it begins to break down quickly. You just need cash for ‘stuff’. The whole, ‘get customers’ doesn’t really go down too well as because:
1. they aren’t that many.

2. to get them it’s like breaking rocks.

3. government-related work will kill you,’’ he says.

He says the best ways to stay afloat during this period is that a ‘‘10 person team should definitely focus on cash flow and profits.’’ Internet investors are few and far between, he says, and learning the discipline to actually run a cash flow positive business is a great life skill. ‘[This is] one I strongly recommend to all young guns of today,’ he says.

The Focus Should Be On The Customer

Focusing on the customers is unarguably the easiest way of remaining profitable. “(T)he №1 thing that has made us successful by far is an obsessive-compulsive focus on the customer as opposed to obsession over the competitor,” Bezos said in a talk at the Economic Club of Washington.

“Our profitability is not our customer’s problem. We don’t take the point of view that we’re going to price products at a particular margin. We price products competitively and if that means [that] on that product that we lose money that’s ok. We need to take care of the customer and earn trust and we’ll figure out over time if we can or if we can’t ever make money with that product. If we can’t we’ll stop selling it but we’re not going to make customers pay for any of our inefficiencies.” — Jeff Bezos said.

Turning attention on what customers want or need has inspired many of Amazon’s most profitable business moves.

For example Amazon Prime. Bezos said at the talk that Amazon developed Prime, a paid subscription service for free two-day delivery because he knew consumers love free shipping. Introduced in 2005, the service drew anger for being “too good to be true” and helped underline the idea that Amazon is too inexpensive to be profitable. The message was clear: Prime is draining Amazon’s profits and its stock.

But it’s clear now that pleasing its customers, rather than bumping Amazon’s short-term bottom line, has been a shrewd business move. Amazon Prime customers spend an average of $1,300 in a year, nearly twice that of non-members. More than 100 million people globally are Prime members.

“There are two ways to build a successful company,’’ Bezos said. ‘‘One is to work very, very hard to convince customers to pay high margins [think Coca-Cola model]. The other is to work very, very hard to be able to offer customers low margins [think Costco, Amazon]. They both work. We’re firmly in the second camp. It’s difficult — you have to eliminate defects and be very efficient. But it’s also a point of view. We’d rather have a very large customer base and low margins than a small customer base and higher margins.”

Today, Amazon.com tops the list of best companies for customer support chat facilities!

Sales Are More Important

With business going, comes the hard part of the truth: actually making sales, because it is the sales that would mean profitability.

Lee Reams II, CEO, CountingWorks says that most small businesses get bogged down in tasks that have nothing to do with driving profits.

‘‘One of the easiest ways to increase profits is focusing on sales from the start,’’ he says. ‘‘The most cost-effective way to turbocharge more transactions is by going all in on using social proof to grow your business. Attracting five-star reviews, using case studies, getting your brand mentioned by bloggers and news media, are all forms of social proof that do the selling for you. Much of the buying process is now done online. If you have not maximized your digital footprint, you are not even in the game as consumers start researching product and services. Your brand needs to be present from the discovery through the intent phase of the buying process. Making social proof an integral part of your marketing plan will drive revenue growth faster than any other change.’’

Coupled with this is the need to build a sound online reputation. Denise Hilton, Founder, WebEmployed.com says that whether your business is big or small, your online reputation matters a lot.

‘‘It not only adds credibility to your business but also tells consumers and other businesses that you care about them and not just the business,’’ he says. ‘‘You need to be active on social media platforms and interact with the visitors regularly. You also need to add call-to-actions on your website and let the visitors contact you easily through web forms, landing pages, etc. Adding a blog to your website and building strategic alliances through joint venturing or cross-promotion is another effective way to build an online reputation. It could help you boost your profits a great deal. The results will slowly but surely be visible in the long term.’’

One way Ford Motor Company remains competitive with its sales is to approach price fixing more fiercely.

“Our policy is to reduce the price, extend the operations, and improve the article. The reduction in price comes first…the low price makes everybody dig for profits”. – said Henry Ford

And you could see the power of it in Ford Motor Company’s numbers:

Manage Your Taxes

Without suggesting that you evade taxes, finding a good tax expert that will help you save tax cost in your first few years of existence is very important. For instance, for Nigerian startups, there are tax incentives that are available to them, but these incentives can only avail them if they can claim them, and on time. Recalling how taxation nearly killed his business, Jason Njoku told a common story faced by most startups.

‘‘in the UK, they have Value Added Tax (VAT), at that time it was 20%, so over and above the cost of the equipment I had to pay VAT in the UK,’’ he says. ‘‘That’s fine, using the Apple bulk importation as an example, upon reaching our beloved Murtala Muhammed International Airport (MMA) the Nigerian customs officials took a particular liking to my ten (10) carefully wrapped and gloriously white ‘packages’. After a 6 hour flight I then proceeded to spend the next 4 hours arguing and debating the importation tax duties required to bring this equipment into Nigeria. All manner of calculations were initially argued amongst the customs officials themselves, then when it was looking increasingly extortionate I thought I would pitch in myself to try and not get totally screwed without at least some resistance. In the end I ended up paying, if my memory serves me right, around N700,000 ($4,600). And guess what, just to twist the knife, they were seizing my goods unless I paid there and then. I have the payment receipt of this somewhere; it’s too late for me to dig it out.’’

This is one of the several ways taxation can stifle your startup directly or indirectly. So, getting a sound tax practitioner or lawyer can be the safest way to escape the burden of over taxation.

Auditing Is The Best Strategy For Tracking Your Finance and Making Adjustment

The best way to always track your finance and expenditure is to go by auditing. Auditing will make it possible for business owners to make more effective decisions, and channel their investment appropriately. Any accounting errors would usually be bad for the future of the company.

Moira Vetter, Founder & CEO of Modo Modo Agency, a strategic marketing firm, that was recognized as a 2018 & 2017 Inc. 5000 company and a 2017 Best Places To Work, advises startups to:

Formalize monthly financial statement review with their team — Awareness is the first step to managing budgets frugally. When the person charged with keeping the books closes the books each month, schedule a meeting to sit down and review the financial statement as a group. Ask questions about line items that are going up. Look for line items that are larger than you imagined and ask questions about why.

Reinvest Profit

Knowing when to reinvest profit into the business is equally important to avoid being an all-time loser.

“Ninety percent of the time a founder should reinvest their profits back into their business because it helps them grow and means they won’t stagnate,” says Matt Jonns, founder of ucreate, a co-creator of software startups. “However, the unpredictability of startup life can make the use of profits to shore up cash flow a smart decision. Keeping this money aside for a rainy day is often just as important as reinvesting and could be the difference between survival and extinction when times are at their hardest.”

Varun Bhanot, head of business development at flexible office marketplace Hubble, shares a similar view in prioritizing growth over pocketing profits. “This enables us to grow faster than our competitors,” he says. “By plowing everything back into the business, it also means the pie is overall bigger in the end. When profits are eventually returned, they are much bigger and substantial than if dividends were given to shareholders in the earlier stages.

However, to create a balance, Matt Jonns advocates founders paying themselves a small minimum wage and using excess profits to support their lifestyle when needed.

“As long as you don’t put your cash flow at risk, spending profits in moderation is essential for your own wellbeing,” he says. “It’s something many founders struggle with, but not something they should feel guilty about.”

Patience

While it may take a long time for startups to break even, remaining patient during the first few years of this period would really be some remarkable feat startups can accomplish.

Dillon Kivo Founder and CEO of Kivo Media Group advises that success certainly won’t happen overnight, and it probably won’t happen for a couple of years.

‘‘Companies that are investing in themselves and carefully and strategically planning ahead for continued efficiency can expect to achieve profitability around their third year in business. But every company is different, and true success may take decades. Steve Jobs established Apple in 1976, but it wasn’t until 1984 that Apple got on the map with the advent of the Macintosh computer. And even then, Apple struggled until the arrival of the iMac and consumer products in the late 90s. As an entrepreneur, as a leader and as a startup founder, it’s critical to know the difference between a great idea and great company. So decide now that you’re all in, and don’t give up when the going gets tough,’’ he says.

Bottom Line

Every year, many startups take off, but only a few remain after long torturous journeys. Most of them die, of course, because they were unable to raise more funds or turn profitable. Knowing how to stay ahead of this by exploring many strategic ways of remaining profitable would be the deciding force for most startups.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.