By Prince Osuagwu & Laju Iren
Necessity, they say, is the mother of invention. Hot climates squeezed out electric fans, long distances pre-existed aeroplanes and far-flung relatives fuelled the rise of social media.
If there is a breeding ground for necessity, it must be called a recession; a term that aptly describes Nigeria’s current state. Appzone’s Executive director, Business Operations and Expansion, Emeka Emetarom, believes that the current recession though hard on many Nigerians, is helping spur innovation.
Emeratom, whose company’s brainchild, Bank One provides specialized services for MicroFinance Banks, did not downplay the current situation when he told Glamtech in an interview: “The recession has hit the microfinance industry hard as it has all other sectors. The reduced economic activity almost directly translates to increased loan default rates not just MFBs, but across all banks actually.”
However, Emeratom opined that the job losses, increased dollar exchange rate, and the general fighting spirit of the average Nigerian all combine to create an atmosphere of new opportunity as small cottage industries start to spring up again, producing local equivalents of imported items many Nigerians can no longer afford.
The Appzone mouthpiece, gave an example of a female entrepreneur who inspired him recently. His words: She produces leather belts out of her backyard. The quality felt like the kind I would expect to see a “made in Italy” sticker on, but to my surprise and total delight, it said “made in Lagos.” Such start up ventures will find a huge market out there for their goods and will need the support of microfinance banks to grow. This will be a huge opportunity for the financial services sector, in general, and for MFBs in particular.