Mr Nengak Yakubu, an accomplished entrepreneur has advocated for the complete adoption of the Microcredit Initiatives of Bangladash and Islamic Banking Bangladesh and Islamic models as realistic and pragmatic strategies to ensure all round success of entrepreneurs as an escape trap out of poverty
Mr Yakubu stated this while responding to a set of questions on Wednesday, 18th April, 2024 on the flagship program, Pointblank News Blog Interactive Session, a platform deliberately created to bridge the gap between leadership and followership.
“Microcredit intiatives of Bangladash (initated in 1970s by Yunus Muhammed also known as Grameen Bank Model), the model has been proven to be effective in lifting millions around the world today out of poverty. It’s the idea behind Microfinance banking, with easier assess to microcredit/microfinancing accessible to the poor”.
“This was the idea behind the establishment of microfinance section that functions to handle the following: Agricultural value chain activities, Manufacturing & Cottage Industries, Artisans, Services, Trade and general commerce, Renewable energy or energy efficient products, and technologies, and any other income generating projects as may be prescribed by the CB”
Dissecting the second model, Mr Nengak said “Islamic Banking is a banking system that prohibits interest charging (Arabic – Riba), promote profit sharing (Arabic: Mudarabah) and Partnership (Musharaba) between the bank and the investors, but insists on Ethical investment (by prohibiting and rejects investments on gambling, Tobacco, prostitution etc), it is an initiative that has lifted hundreds of thousands out of poverty across the world”.
He listed developed countries that have successfully implemented this model to include KT Bank (Germany), Devon Bank (USA), Luxemburg (UK).
The Entreprenuer opined that entrepreneurship has actually recorded its aim of lifting people out of poverty in Nigeria yet. “Today we have millions of young people in Nigeria who tagged themselves as successful entreprenuers yet rush at every single appearance of government job advertisements, sometimes use their savings to purchase such jobs through the backdoor. Is this because of the glamouring Job security? Not at all. It’s because of the troubling reality that they only seek to escape poverty traps”.
Speaking on entrepreneurship as the reliable strategy to escape poverty traps, Mr Yakubu urged the youth to register businesses at Corporate Affairs Commission to legitimaize them for easy access to funding. He applauded CAC ease of doing business by ensuring registration of businesses is not as cumbersome as it used to be. “There have been lot of ease with regards to how businesses can be registered, more than ever. Registration by SMEDAN is completely free, and CAC is fairly easy. These are reconditions for qualifications on many funding opportunities”
He lamented government futile efforts in the past to make entrepeureshipwork, faulting the approaches and methodology employed. “Over the past 15 years, government have spent hundreds of billions on rescuing Nigerians from poverty, but it has so far yielded little results compared to the financial commitment, this is either the approach is wrong or the actions was poorly executed”.
He said the failure to successfully turn around the fortune of entrepreneurship in the country could also be attributed to “POVERTY TRAPS & GRADUATION APPROACH”
“An Economic Concept called poverty traps, whether an economic activity (business) is cycling within a stream of income that fades easily due to negative impacts on the business, economy or family needs.
“By Emphasis, there are Failures to entrepreneurial activities that are attributed to the individuals involved and there are factors beyond the reach of the entrepreneurs but Government policies (For instance, Mathew was among the people rescued by diplomatic grounds from Libya as they were trying to flee this country via Libyan route, an interesting fact is that his business value in Nigeria worth over 3 million naira, why? Change of government and change of government policies has rendered even much bigger entrepreneurs redundant, earn more but within the poverty trap, he will rather start afresh in a stable economy)
Identifying the Graduation approach as the most realistic approach for young entreprenuers, Yakubu said “An influential (effective) anti-poverty programme predicated on the idea that there exist poverty traps and it’s possible to escape it. An idea that argues; by giving the people a capital infusion that help their businesses to boost up or start afresh, can help them escape poverty traps. The Capital infusion given to inviduals as grant, gift and not loan can help them escape poverty”
Categorizing definite businesses on the Plateau that the youth can engage in, he recounted a personal experience “Over the years, I have visited farmers on Piggery, fish farms, rabbit farms, crop production (Onions, peppers, Irish, Acha etc) and even Animal husbandry”.
He however, lamented lack of funding as a major challenge for statrters on the Plateau despite government’s agency like Plateau State Micrfinance Development Agency “All the above have been thriving on the plateau. Financing has been a major concern, but also our neglects contributed to it. Some funds were made available for MSMEs through PLASMIDA, but were rarely accessed, and unfortunately religion has played a part in distancing us from accessing good options for funding especially for businesses at the Break-even point” (expansion)”
Ascertaining “Insistence on Quality and Honesty as wholemark” of entrepreneurship, he said “I was buying locally made shoes from Jos to be sold in Maiduguri. The market was fast and it was pretty rewarding; soon enough the shoemakers started compromising their qualities. I started making loses because of many refunds I had to make (consumers always insist on quality espcially when the charges are high), I changed suppliers severally but along the way, I always encounter the same challenge when they get too comfortable with the succcesses.
“I made supply to some Nigeria students residing studying at Arabs University of Maritime Engineering, the experience was bad due to bad finishing they spotted in many of the shoes, and my knowledge of good finished shoes was very limited as at then. This resonates also a point that entreprenuership requires knowledge of the particular line of business one is venturing into, as well as honesty, and insistence on quality which are sure for the sustainability of the business”.
He advised that “As an Entreprenuer, you shouldn’t be hasty with a quest to make quick wealth by charging too much profit on your products or in dishonesty; just keep on solving problem and keep on expanding the business capacity by reinvesting your profits, the wealth will come. Also avoid expending your spending at the early stage (income hypothesis)”
