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Owoafara to Assist Underserved Nigerian SMEs

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owoafara

By Adedapo Adesanya

Nigerian startup, Owoafara, has announced plans to help small businesses grow and scale sustainability by connecting them with finance and business services.

The firm, which was founded in January 2019, was launched to solve the access to finance and business support problem of over 50 million underserved small businesses.

Mrs ‘Tale Alimi, who co-founded Owoafara alongside Ms Sally-Ann Ezekiel, said the startup’s first MVP, launched in November 2019, was a credit scoring and fund-matching platform to give small businesses a credit score and match them with financial institutions that would fund them.

“We have over 15 financial institutions signed up on the platform and have been able to facilitate $100,000 in transactions,” she said.

“However, we soon realised that most small businesses do not meet the typical criteria of traditional financial institutions so, the unit economics did not make sense for us to build a sustainable business,” she added.

So, in May this year, the startup launched Rouzo, a debt crowd-funding platform that uses Owoafara’s credit scoring algorithm to verify small businesses and then lend to them directly from money invested on the platform by users. It has also rolled out Suppotr, which helps companies access business services.

The lack of support available to small businesses in Nigeria became evident to the founder when she was running a direct to consumer fashion brand a couple of years ago.

“Sales grew fast, to thousands of dollars in GMV, but I could not get access to loans to expand production and distribution. I later lost the business to a shark investor,” she said.

“Sally-Ann had also worked in financial services previously and tried to pitch financial institutions to adopt the product Owoafara was trying to create. When our efforts were not successful, we joined forces to create this company.”

The startup, which has raised small friends and family funding round and took part in the Labs by ARM accelerator earlier this year, has verified over 450 businesses since it launched Rouzo and is currently growing its major metrics by almost 100 per cent month-on-month.

For now, Owoafara is focused on Lagos, but the founder said it has expansion plans.

“We plan to expand to five major cities within Nigeria in the next 12 months before we start regional expansion out of Nigeria,” she said.

The startup makes money from commission, fees, and the spread it gets between the asset under management and the loans under management.

“Our revenues are growing over 80 per cent month-on-month,” said Mrs Alimi.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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Economy

NGX Gains 0.75% as FBN Holdings Sustains Aggressive Buying Momentum

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By Dipo Olowookere

The Nigerian Exchange (NGX) Limited appreciated by 0.75 per cent on Friday as the local demand for FBN Holdings Plc stocks was sustained during the final trading day of the week.

This raised the All-Share Index (ASI) by 308.17 points to 41,438.15 points from 41,129.98 points and as for the market capitalisation, the listing of 1.964 billion shares of NGX Group Plc shares on the exchange yesterday expanded it by N193 billion to N21.625 trillion from N21.432 trillion.

The market breadth closed positive yesterday with eight declining stocks and 30 appreciating equities led by SCOA Nigeria, which rose by 9.20 per cent to 95 kobo and was trailed by Custodian Investment, which grew by 8.96 per cent to N7.30, International Breweries went up by 8.70 per cent to N5.00, FBN Holdings rose by 8.09 per cent to N12.70, while GlaxoSmithKline grew by 6.56 per cent to N6.50.

On the flip side, Chams depreciated by 8.33 per cent to 22 kobo, University Press fell by 6.25 per cent to N1.50, Lafarge Africa declined by 4.74 per cent to N24.10, Africa Prudential lost 3.62 per cent to trade at N6.65, while Sterling Bank dropped 3.18 per cent to N1.52.

During the trading session, the trading volume fell by 19.72 per cent to 729.0 million units from 908.1 million units, the trading value dropped 22.25 per cent to N8.5 billion from N11.0 billion, while the number of deals declined by 5.80 per cent to 4,852 deals from 5,151 deals.

FBN Holdings sustained its aggressive buying momentum on Friday and emerged as the most traded stock at the close of transactions with a turnover of 476.5 million units transacted for N    5.9 billion.

Universal Insurance exchanged 39.7 million stocks worth N8.3 million, GTCO traded 33.2 million equities valued at N972.4 million, Fidelity Bank transacted 21.9 million shares worth N59.8 million, while Transcorp sold 20.8 million stocks valued at N20.4 million.

Business Post reports that the five main sectors finished positive yesterday with the consumer goods index rising by 0.91 per cent. The energy sector gained 0.86 per cent, the insurance counter rose by 0.84 per cent, the industrial goods space went up by 0.75 per cent, while the banking sector appreciated by 0.34 per cent.

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Economy

FG Urges UK to Ease Restrictions, Tariffs on Nigerian Businesses

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Nigerian businesses

By Sodeinde Temidayo David

The Minister of Industry, Trade and Investment, Mr Adeniyi Adebayo, has called on the United Kingdom to address the challenges faced by Nigerian businesses, especially with regard to restrictions and tariffs.

This was revealed at the 6th ministerial meeting of the UK to Nigeria Economic Development Forum (EDF) held virtually on Friday, October 15.

The minister in his words stated, “Inasmuch as we are flexible and committed to facilitating UK business concerns, we also request that the UK should continue to reciprocate and address the challenges faced by Nigerian businesses, especially with regard to restrictions and tariffs.”

Mr Adebayo also expressed optimism that as the impact of the COVID-19 pandemic eases on economies, efforts towards building the capacity of Small and Medium Enterprises to attain relevant certifications for export to the UK and the European Union (EU) markets will be prioritised.

He stressed the importance of the trade policy relationship between the two countries and pointed out that work was in progress towards reviewing Nigeria’s trade policy document to reflect the current realities.

He further commended the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed and the Comptroller-General of Customs, Mr Hameed Ibrahim Ali for being proactive in improving trade facilitation for UK businesses in Nigeria.

“It is my hope that the UK remains committed to facilitating deliberations for the purpose of addressing issues raised at the 4th Business Dialogue,” he added.

Following the agreements resulted in the forum, the minister noted the need to revive the workstreams with timelines, which had been adopted in the past, as a means of keeping track of the country’s deliberations and commitments.

“I also encourage periodic stock-taking of our progress, to ensure that we are on course with committing to timelines and most importantly to ensure compliance with agreed decisions,” he said.

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Economy

Naira Gains 1.7% at Official FX Window as Devaluation Fears Quell

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Official FX Window

By Adedapo Adesanya

The Naira appreciated against the US Dollar at the Investors and Exporters (I&E) window of the foreign exchange (FX) market by 1.7 per cent or N7 on Friday, assuaging fears that the currency will be devalued again.

The local currency sold for N415.07/$1 at the official FX window yesterday in contrast to N422.07/$1 it traded on Thursday, according to data obtained from FMDQ Securities Exchange.

The Nigerian currency had suffered a significant loss a day earlier after investors feared that the Central Bank of Nigeria (CBN) may be forced to devalue the Naira again.

Speaking at the Economic Sustainability Plan (ESP) earlier this week, Vice President Yemi Osinbajo had said there was a “need to move our rates to [be] as reflective of the market as possible. This, in my own respective view, is the only way to improve supply,” which was indicative of devaluation.

He progressed by saying that, “We can’t get new dollars into the system, where the exchange rate is artificially low. And everyone knows how much our reserves can grow. I’m convinced that the demand management strategy currently being adopted by the CBN needs a rethink, and that is just my view.”

He also lamented the lack of access to forex for the importation of systems and raw materials as one of the contributory factors of the current economic situation.

Although the Vice President has come out to say he did not call for a devaluation, the market had spurred to action but has now rebalanced.

At the final session of the week, a turnover worth $337.28 million was recorded as against $141.94 million published at the preceding session.

This indicated a $195.34 million or 137.6 per cent surge in the daily turnover of the specialised market that caters to the country’s investors and exporters.

However, the domestic currency closed flat against the American Dollar at N410.91/$1 at the interbank segment of the forex market on Friday.

Meanwhile, Bitcoin (BTC) continued a surge at the cryptocurrency market, trading at N34,900,200.01 after a 6.1 per cent gain as hopes grew that regulators in the United States would allow a futures-based exchange-traded fund (ETF), a move likely to open the path to wider investment in digital assets. It largely spurred a boost in the most popular digital currency and also robbed off on some others.

Tron (TRX) added 2.9 per cent to trade at N55.58, Dash (DASH) rose by 2.5 per cent to sell for N107,420.17, Binance Coin (BNB) made a 1.2 per cent appreciation to trade at N194,938.27, Litecoin (LTC) sold for N101,102.04 after rising by 0.4 per cent, while Ethereum (ETH) gained 0.3 per cent to trade at N2,174,753.84.

On the losing side, Dogecoin (DOGE) was 1.3 per cent down to sell at N133.66, Cardano (ADA) fell by 0.8 per cent to N1,254.12, the US Dollar Tether (USDT) moved downwards by 0.6 per cent to sell for N568.38, while Ripple (XRP) lost 0.3 per cent to trade at N644.01.

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