Wema Bank Signs Davido as Brand Ambassador

Lagos, Nigeria. Friday, December 3, 2021: Nigeria’s leading digitally-driven financial institution, Wema Bank today announced the signing of Davido as Brand Ambassador for its digital bank, ALAT By Wema. The bank formalised the partnership at a ceremony on Friday, December 3 when the musician signed the dotted lines.

A few weeks ago, the multiple award-winning artiste raised N200 million when he posted his ALAT account before his 29th birthday and asked industry friends to donate. Subsequently, he personally contributed N50 million and announced plans to donate all funds raised to orphanages across the country.

On Friday, the innovative and customer-centric bank and the musician affirmed their partnership with Davido’s announcement as Brand Ambassador at its corporate headquarters in Lagos.

Speaking at the ceremony, the Managing Director/CEO, Wema Bank, Ademola Adebise, lauded Davido’s artistry, including his body of work and generosity, noting that it takes a genuine altruist to do what he did by giving away all the donations.

He added that Davido’s announcement as their Brand Ambassador affirms the bank’s strategic repositioning efforts and its youth-centric focus.

 “We welcome you warmly to our great family, the home of innovators and enterprising people who meet our customer’s needs with innovative products and excellent services that fit their lifestyles and empower their aspirations. You are set for a good time with us, and we assure you this relationship would be mutually beneficial,” Adebise said.

Speaking on the brand ambassadorship and his association with Wema Bank and ALAT. Davido said, “I am excited to join the Wema Bank family and look forward to the great things we will achieve together.”

At the signing ceremony, Davido was taken on a tour of Wema Bank’s corporate headquarters in Marina, Lagos, and was hosted at a cocktail reception at The Wings Complex in Victoria Island.

Speaking at the end of the ceremony, the Head, Marketing Communications and Investor Relations, Wema Bank, Funmilayo Falola, thanked the artist and his management team, while affirming Wema Bank’s commitment to excellent service.

Credit Score - How to check your credit score and also improve it

Loans in Nigeria: How to check your credit score and also improve it

Loans in Nigeria

The term “Credit score”, isn’t usually considered as part of our day-to-day lingua here in Nigeria. However,  in other countries and certain cases where one would like to take a loan from a bank, the term is often used. In this article, we will look at what a credit score is, how it works, and how it affects your loan application.

What is a credit score?

A credit score is a 3-digit number, ranging from 300 to 850 (using the VantageScoring model), that indicates the level of risk associated with granting credit or loan to a prospective borrower or customer. The lower it is, the higher the risk and shows that there is a high chance that the customer may default in payment, and vice versa. The scores are ranked as excellent, good, average, or poor. Simply put, a credit score is a representation of your creditworthiness.

Below are credit worthiness scales;

  • 720 and above: Excellent credit
  • 690-719: Good credit
  • 630-689: Fair credit
  • 300-629: Bad credit

Lenders and creditors often use the credit score for various risk assessment purposes ranging from market expansion, pre-qualification of customers, to credit evaluation.

Good vs Bad credit score

Good Credit Score: Someone with a track record of making all credit payments on time, clearing debt balance, and taking justified loans will have a good credit score. Any credit score which has credit utilization below 30% is considered a good score.

Bad Credit Score: A bad credit score generally falls below 630 on a scale of 300-850 for the most common scoring models, FICO and VantageScore. Scores of 630 to 689 are considered fair credit.

Why is it Essential to Have a Good Credit Score?

  1. You’ll be able to apply for low-interest loans, car loans, home loans, and other personal loans from lenders as they first check their credit scores to determine their creditworthiness. 
  2. Secure higher credit limits on credit cards: Although they are not so common or widely used, credit cards can be gotten in Nigeria, but until recently, they were majorly acquired on special requests from your bank. A good credit score is an indicator of your creditworthiness and you can take advantage of that in the form of higher credit limits on your cards.
  3. Access to highly rated credit cards: Several financial institutions offer best-rewarding credit cards to customers with good credit scores. These cards often come with certain privileges in the form of discounts on different online shopping platforms, cashback, complimentary movie tickets, discounts at luxury dining restaurants and hotels, travel miles, and much more.
  4. Eligible for a pre-approved loan offer: A good credit score will increase your chances of being able to get pre-approved loans at low-interest rates from banks and financial institutions.

What factors impact your credit score?

  1. Debt Accumulation: Outstanding debts can greatly weaken your credit score. In the same vein, paying up your debts late can also negatively impact your creditworthiness.
  2. Constant credit applications it is essential to manage how often you apply for credit. If you apply too many times, you can further weaken your score. Try to space out your applications to avoid this.
  3. When you travel out of Nigeria and you do receive a credit card from your bank, be sure to use it wisely and within limits. Using the credit card within limits and ensuring timely payment of the bills will positively impact your credit score.
  4. Check your credit score regularly: This helps to know how well or how terribly you’re doing at managing your credit.  It can also help you to identify any inaccurate or incorrect information and rectify it.

How to check your credit score

Every Nigerian is entitled to one free Credit report every year from any registered Nigerian Credit Bureau. To get a free credit report in Nigeria, use any of the following sources:

  1. Dial the USSD code *565*8# on your mobile phone to get instant Credit reports from CRC Credit Bureau.  This service is currently available to MTN subscribers only. Read about ALAT USSD Code and how to use them
  2. Get a free credit report from Nigeria’s first independent licensed credit bureau. You only get one free report per month.

Who Can See Your Credit Report?

Fortunately, not everyone can see your credit score. In actual fact, there’s a shortlist of people or entities that can access your credit report and these people or organizations must have what is known as a “permissible purpose”, which includes;

  • An applicant or a guarantor for credit
  • Review, renew, restructure or monitor credits
  • Employment checks
  • Prospective tenants
  • Underwrite, review, or renew insurance policies or analyze insurance claims
  • Application for credit contracts or other post-paid services
  • Debt collection, enforcement of a monetary judgment, or enforcement of any other debt
  • Carry out KYC checks on any person for any permissible purposes
  • Directive of a regulatory authority or a public body
  • Compliance with a court order

People who can see your credit score include;

  • Banks, specialized banks, and other financial institutions
  • Leasing companies
  • Insurance companies
  • Cooperative societies and institutions that offer credit to SMEs
  • Utility companies including electricity, telecommunications, and water corporations
  • Asset management companies
  • Suppliers of goods and services on a post-paid, deferred, or installment payment basis
  • Entities that in their ordinary course of business have relevant information that complies with Permissible Purposes
  • CBN’s CRMS.

Do credit scores affect loan applications?

Yes, they do. The first thing lenders will look out for when considering your loan application is your credit score.

This is why it is particularly important to pay attention to your credit report. It determines whether lenders and creditors will do business with you and how good of an interest rate you get on financial products!

How do I get on ALAT?

Click here to download the app or on Google Play (for Android phones) or on iOS App Store (for iPhone). If you have a Wema Bank account, sign up on ALAT  and follow the prompts on your screen. If not, follow the prompts on your screen still to sign up on ALAT.

The eNaira For Business Owners

As promised, we recently, and while our alumni are aggressively applying all that they learned in their business operations, we remain ever vigilant in our duty of spotting and identifying new and exciting opportunities for our customers.

The end of the year is fast approaching, and what a year it’s been. Traditionally, the end of the year brings with it much reflection and planning, as we look back at the closing year and look ahead to the coming one. Amid all this thinking, however, one can often miss out on promising opportunities which may present themselves as the year ends. Therefore you need a trusted business partner (i.e., Wema Bank) to keep an eye out on your behalf.

In the context of the Nigerian market in 2021, one of such opportunities which we have flagged is the rollout of the CBN’s eNaira on Monday, October 25, 2021. This innovation, the first of its kind on the African continent, is billed to expand nationwide access to banking, enable more remittances, and increase Nigeria’s GDP by $29 billion over the next ten (10) years, and it offers up an exciting plethora of opportunities for you as a business owner, to grow your business. It is because of the exciting potential of this new currency that we at Wema Bank have decided to make the eNaira the subject of this month’s newsletter.

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But isn’t it bitcoin?

Think of your regular everyday business transactions. If you are like most Nigerians, the scene playing in your head would go something like this: a customer walks into your shop and identifies a product that they want to pay for. At the point of payment, the customer will reach into their pocket and pull out their wallet (or a crumpled wad of cash), count out the required number of notes, and then hand them over to you as payment. You will then take the cash, recount it to verify that it is the right amount, and then put the money in your own wallet (or in the till of your cash register) and (sometimes) hand over a receipt. Once this is completed, the transaction is done.

With the eNaira however, this same transaction would be performed entirely without the use of physical cash, as payments will be made with the use of mobile devices—much like our regular bank transfers today.

Contrary to what you may think, the eNaira is not bitcoin. Unlike bitcoin (and other coins like Ethereum, Dogecoin and so on) which are cryptocurrencies that are not issued by a central authority; the eNaira is a digital currency issued by a Central Bank—a Central Bank Digital Currency (CBCD). This means that the eNaira is a legal tender of the Federal Republic of Nigeria, and as such is a direct liability of the CBN. It is therefore regulated and subject to the various banking laws of the nation.

Johnson Chukwu, the Founder and Managing Director of Cowry Asset Management Limited explained the eNaira by saying, “it’s not in coins and it’s not in notes, it’s in [a] virtual format. So, you can’t physically hold it, but you have it as a store of value, as a piece of payment, and it’s backed by the good faith of the central bank . . . for every unit of that currency you hold, the central bank can give you physical naira.”

The CBN has continuously reiterated the fact that the eNaira is not intended to replace the physical Naira but is only expected to work alongside it; as expressed in the digital currency’s tagline: “Same Naira, more possibilities”. Furthermore, the eNaira and the Naira will always be exchanged 1:1.

You can consider the eNaira as yet another stage in the CBN’s drive to reduce cash usage in Nigeria.

Why do I need the eNaira?

The eNaira will complement existing payment options that are currently available via mobile banking apps, point of sale (POS) terminals, USSD, Quick Response (QR) codes, Internet banking and other channels.

In its Design Paper for the eNaira, the CBN has stated that it intends for the eNaira to do the following:

  • Improve the availability and usability of Central Bank money
  • Support a resilient payment ecosystem
  • Encourage financial inclusion
  • Reduce the cost of processing cash
  • Increase revenue and tax collection
  • Enable direct welfare disbursements to citizens
  • Reduce the cost & improve the efficiency of cross-border transactions
  • Facilitate diaspora remittances

Additionally, transactions executed with the eNaira will guarantee:

  • Instant settlement
  • 9% service availability and reliability
  • Low charges
  • No dispensing errors
  • No reconciliation issues
  • Low charges (the CBN has assured users of zero charges for the first 90 days of the eNaira’s launch—October 25, 2021)
  • Nationwide acceptance
  • No dispensing errors
  • Advanced data privacy and security

As a merchant on the platform, the following types of transactions are available to you:

  • Merchant/Business to (commercial) bank account
  • Merchant/Business to Person (Individual)
  • Cash or (commercial) bank account to eNaira Speed wallets

Merchants will pay no fees for withdrawals and deposits to and from their bank account. They are also required to sweep their outstanding eNaira balances into their account(s) with a financial institution at the end of every day. There are no limits on transaction amounts for merchants (business owners). It should also be noted that the customers will not earn interest on eNaira deposits.

The eNaira payment system will offer a broad range of services that will expand as adoption arises and new use cases are developed.

How can I get the eNaira?

To access and use the eNaira, you will have to create an eNaira wallet, which is the digital storage that holds the eNaira. This wallet, the CBN’s Speed Wallet is available for free download on the Google Play store and the Apple App store. Each wallet is tied to a BVN or NIN and can only be used once to prevent duplicate identities and wallet creation on the eNaira platform.

The requirements for a Merchant Wallet are as follows:

Category Requirement Daily Transaction Limit (₦) Daily Cumulative Balance (₦)
Bank Account Holders BVN, TIN & Bank confirmation Send

No limit

Receive

No limit

No limit (with Auto sweep trigger)
         

 

The eNaira payment system will be compliant with AML/CFT guidelines to ensure its safety and integrity, and to achieve this, the CBN has adopted an account based CBDC, meaning that all eNaira wallets are linked to the user’s account in an approved financial institution, like Wema Bank. To facilitate this, customers will have to select their preferred banking partner (Wema Bank) during the onboarding process.

Once the wallet has been created, users will be able to transfer money into it from bank accounts or credit cards and send and receive payments to others using the digital currency.

Also note that the technical partner of the CBN for the eNaira rollout, Bitt Inc., has announced plans to release a version of the eNaira wallet that will be accessible to previously unbanked users.

Conclusion

In its Regulatory Guidelines on the eNaira, the CBN outlines the roles of merchant users of the digital currency. These are:

  1. Providing customers with alternative channels for making transactions using the eNaira
  2. Providing cashback services for customers
  • Publicising the option of eNaira payment for transactions at merchant locations
  1. Protecting their eNaira speed wallet credentials against fraudulent access.

The successful delivery of these roles will ensure for an inclusive and rewarding user experience with the eNaira.

As said previously, the expectation of the CBN is that the eNaira will complement the “traditional” (physical) Naira by providing a less costly, more efficient, generally acceptable, safe, and trusted means of payment. This is sufficient reason for a businessowner to seek to move their payments and other financial transactions to the eNaira ecosystem.

In addition to the aforementioned benefits, the potential offered up by the eNaira as a tool for cross-border trade and remittances, particularly in light of the launch of the Africa Continental Free Trade Agreement (AfCFTA), is one that promises to boost the business operations of any businessowner who onboards on the platform. This, if all the reasons that have gone before are not enough to sway you, is certainly reason enough for the astute businessowner to get some eNaira as soon as possible.

Author- Somtochukwu Okoroafor

How To Expand Your Business With The Leverage Of Franchising

Small and Medium Enterprises (SMEs) have been termed as the engine of growth of an economy. This implies that they have been recognized as the major variable for promoting private sector, development, and partnership in an economy. Copious literatures have been written on Small and Medium Enterprises indicating historical experiences of economic growth and development in various countries replete with success stories of the salutary effect and positive impact and contributions of SMEs in industrial developments, technological innovations, and export promotion. However, SMEs in developing countries face enormous challenges in attracting investors and accessing modern technology to enhance growth. Among these challenges is an inability to achieve economies of scale through integration or linkages, and the problems of size and relative isolation caused by the difficulties in entering national and global value chains driven by large multinational corporations. The most common barrier to expansion faced by today’s small businesses is a lack of access to capital. Even before the credit-tightening of 2008-2009 and the “new normal” that ensued, entrepreneurs often found that their growth goals outstripped their ability to fund them.

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In a bid to expand SMEs, various strategies have been suggested by different authors. For any Small and medium business willing to grow in a sustainable market, it is recommended that franchising should be adopted.

Franchising is a marketing concept which can be adopted by an organization as a strategy for business expansion. It is a type of business that is owned and operated by an individual (franchisee) but that is branded and overseen by a much larger—usually national or multinational—company (the franchisor). Where implemented, a franchisor licenses some or all its know-how, procedures, intellectual property, use of its business model, brand, and rights to sell its branded products and services to a franchisee. In return, the franchisee pays certain fees and agrees to comply with certain obligations, typically set out in a franchise agreement.

Adopting a franchise system business growth strategy for the sale and distribution of goods and services minimizes the SME's capital investment and liability risk. Franchising is an alternative form of capital acquisition in that it will allow small and medium businesses to expand without the risk of debt or the cost of equity.

However, since the franchisee signs the lease and commits to various contracts, franchising allows for expansion with virtually no contingent liability, thus greatly reducing the risk to the franchisor. This means that as a franchisor, not only do SMEs need far less capital with which to expand, but their risk is largely limited to the capital they invest in developing their franchise company—an amount that is often less than the cost of opening one additional company-owned location.

The franchise system is not an equal partnership, especially due to the legal advantages the franchisor has over the franchisee, but under specific circumstances like favourable legal conditions, financial means, transparency and proper market research, franchising can be a vehicle of success for both franchisor and franchisee.

In addition, franchising is certain to aid a small and medium business in capturing a market leadership position before its competitors encroach on its space. Franchising not only allows the franchisor financial leverage, but it also allows it to leverage human resources as well. Franchising can allow small and medium-sized business to compete with much larger businesses than theirs, so they can saturate markets before these companies can respond.

How do SMEs expand business with leverage on Franchise?

To start with, the SME in question will do well to recognize or identify its strengths. This can be accomplished with the use of the SWOT analysis matrix. The SME is also expected to have a solid business plan, as it going to be carefully selecting its franchise owners and ensuring tight control. The franchisee should get in details the competitive strategy, business concept, marketing strategy and of course the location strategy of the business.

According to Newman, to ensure an expansion of business through franchise, such business should build up its share of the market first before opening franchises outside its immediate area. It is important that such business fully penetrate its home market first, then gradually grow its base and expand outwardly.

Another way by which an SME can expand through franchise is to have a good robust business model to perform well and be a formidable competitor in its industry. The enterprise needs to use its early franchise location to test out and perfect its concept. The business model should be capable of perfecting the economic feasibility, product appearance and so on.

The businesses involved should ensure that all necessary legal documents such as franchise contract, licenses and registration are put in place as this also contributes to the success of a franchise relationship.

Just as with hiring employees, choosing franchisees can have a huge impact on the success or failure of a small business. It is harder to manage franchise owners because they have invested their own money and want to run their own show. So, choosing wisely is key by making sure that the franchisee candidates have a passion for the business, the necessary financial and business savvy to do the job and that the franchisee can maintain the high standards of the business.

In conclusion, for every franchising agreement, it is very pertinent that the franchisor stays in close touch with the franchisee even after the familiarization period so that growth of the brand can be achieved alongside the success of the overall organization.

Author – Gbolahan Owoeye

Wema Bank announces growth of 135.8% in Profit Before Tax; Total Assets now above ₦1trillion Naira

LAGOS, NIGERIA – 22nd October 2021 – Wema Bank PLC (Bloomberg: WemaBank:NL) (“Wema” or “the Bank”) announces its unaudited 9M 2021 financial results. 

Commenting on the results, the Chief Finance Officer Mr Tunde Mabawonku said, “we are delighted to announce the Bank’s 9M 2021 results which shows strong growth in key financial metrics despite the challenging macro-economic environment arising from heightened inflation, supply chain disruptions and the continued pass-through impact of the Covid-19 pandemic.”

“The numbers show the Bank continues to grow and improve its market share. We have now comfortably crossed the ₦1trillion mark in total assets and have a share of close to 3% of industry deposits”.

Wema Bank recorded an increase of 135.8% in profit before tax (PBT) to close the quarter at N7.2billion. This follows a Year-on-Year growth of 9.1% in gross earnings to ₦63.1billion in 9M 2021 from ₦57.8billion in 9M 2020.

According to Tunde Mabawonku, “The key measure of success for us is growth in customer numbers and customer activity – and we are glad that we are reporting strong growth here.” Deposit Liabilities grew by 9.3% to ₦879.8billion in 9M 2021 from ₦804.9billion in FY 2020 while Total Asset increased by 10.7% to ₦1.08trillion in 9M 2021 from ₦979.5billion in FY 2020.

We have also unveiled our new Mission and Vision statements which align to our strategy. We want to be the dominant digital platform in Africa delivering seamless financial services. This plan started with the launch of ALAT a few years ago and is now being accelerated in the last few months.

“We are sure to close the year with an even stronger performance; we will also continue to focus on our digital business, which is a key boost for customer acquisition, consumer lending and transaction volumes while not neglecting our corporate and commercial play. On our commercial business, we will continue our aggressive strategy to improve our commercial lending business alongside trade and other revenue lines’.

 

Income Statement

· Gross earnings increased by 9.1% (Y-o-Y) to ₦63.1billion in 9M 2021 from ₦57.8billion in 9M 2020.

· Profit before Tax (PBT) and Profit After Tax (PAT) of ₦7.2billion and ₦6.2billion respectively, an increase of 135.8% in 9M 2021 (9M 2020; ₦3.1billion PBT, ₦2.6billion PAT).

· Net-Interest Income grew to ₦28.4billion in 9M 2021from ₦20.1billion in 9M 2020; growth of 41.5%.

· Non-Interest Income also increased from ₦11.4billion in 9M 2021 to ₦11.5billion; growth of 0.9%.

 

Statement of Financial Position

· Deposit Liabilities up by 9.3% to ₦879.8billion in 9M 2021 from ₦804.9billion in FY 2020.

· Loans and Advances to Customers rose by 10.3% to ₦397.3billion in 9M 2021 from ₦360.1billion in FY 2020.

· Total Asset increased by 10.7% to ₦1.07trillion in 9M 2021 from ₦979.5billion in FY 2020.

 

Key Ratios

· Return on average equity of 15.04% in 9M 2021 (9M 2020; 7.26%)

· Return on average assets of 0.90% in Q9M 2021 (9M 2020; 0.48%)

· 4.30% Non-performing loan ratio (9M 2020; 4.67%)

· Capital adequacy ratio of 11.64% (9M 2020; 11.35%)

 

Operational Achievements

· Fitch re-affirms Wema Bank’s National Long-term rating at (BBB)

· GCR and Agusto re-affirm Wema’s National Long-term rating at (BBB-)

WEMA BANK announces a growth of 149% in Profit Before Tax (PBT), to N4.3billion.

LAGOS, NIGERIA – 28th July, 2021 – Wema Bank PLC (Bloomberg: Wema NL) (“Wema” or “the Bank”) announces its unaudited H1, 2021 financial results.   

Key Financial Highlights

Total assets N979.52bn (FY 2020) N1.02trn (H1 2021)
Gross earnings N37.95bn (FY 2020) N39.82bn (H1 2021)
PBT N1.72bn (H1 2020) N4.30bn (H1 2021)
CAR 11.00% (H1 2020) 13.2% (H1 2021)

Commenting on the results, Mr. Ademola Adebise, the Managing Director said, “We are pleased to release our results for the first half of the year. Our performance speaks to the spirit of resilience that runs through the organization as we have strongly bounced back from the covid impacted performance of the same period in 2020.

“As the economy opens back up fully, we expect to see a stronger performance for full year 2021. Over the course of the second half of 2021, the bank will continue its strong focus on the digital business, pushing for further gains in customer acquisition, consumer lending and transaction volumes while on the commercial side of the bank, we will continue to aggressively grow our commercial lending business alongside trade and other revenue lines.”

The bank recently appointed Mr. Emeka Obiagwu as an Executive Director while Prince Olusegun Adesegun & Adeyemi Adefarakan were appointed as Non-Executive Directors.

The Chief Finance & Strategy Officer, Tunde Mabawonku said “We are delighted to announce the Bank’s H1 2021 results. The performance shows growth in key financial metrics despite the challenging macro-economic environment arising from the covid 19 pandemic.”

  • Wema Bank recorded YoY growth of 149% in profit before tax (PBT) to close the quarter at N3bn;
  • Gross earnings grew by 4.94% y-o-y to ₦82bn in H1 2021 (H1 2020: ₦37.95bn).
  • Net fee and commission income increased by 71.7% y-o-y to ₦40bn in H1 2021(H1 2020: ₦3.1bn), due to 112.6% increase in credit related fees, 151.5% increase in management fees, 147.7% growth in fees on financial guarantees.

According to Mr. Mabawonku, “The key measure of success for us is growth in customers and customer activity – and we are glad that we are reporting strong growth here.”

  • Total liabilities grew by 4.9% to ₦9bn in H1 2021 (H1 2020: ₦909.2bn), driven by deposits from customers which grew by 0.5% to ₦808.8bn in H1 2021 (FY 2020: ₦804.8bn)
  • Cost of funds declined to 5.3% from 6.4% in H1, 2020. NPL numbers remained below 5% at 3.55% while Capital Adequacy of 13.24% is above the regulatory minimum of 10%.

 Income Statement

  • Gross earnings increased by 4.94% (Y-o-Y) to ₦82bn in H1’2020 from ₦37.95bn in H1 2020
  • Reported Profit before Tax (PBT) and Profit After Tax (PAT) of ₦30bn and ₦3.70bn, an increased by 148.8% in H1’2021 (H1’2020; ₦1.72bn PBT, ₦1.49bn PAT)
  • Net-Interest Income grew by 55.2% to ₦31bn ( H1’2020: ₦11.80bn)
  • Non-Interest Income declined to ₦64bn from ₦8.30bn in H1’2020

Statement of Financial Position

  • Deposit Liabilities up by 0.5% to ₦87bn (FY 2020: ₦804.87bn)
  • Net loans grew by 3.63% to ₦15bn (FY 2020: ₦360.08bn)
  • Total Asset increased by 4.76% to ₦02trn (FY 2020: ₦979.52bn)

Key Ratios

  • ROAE of 14.03% in H1’2021 (H1’2020; 6.25%)
  • ROAA of 0.82% in H1’2021 (H1’2020; 0.42%)
  • 55% NPL ratio (H1’2020; 5.58%)
  • CAR is 13.24% (H1’2020; 11.00%)

 Operational Achievements

  • Fitch, GCR and Agusto re-affirm Wema’s National Long-term rating at (BBB-)

ALAT to Host Third Edition of Talk Series

ALAT by Wema, Nigeria’s first fully digital bank, will host the third session of its Talk Series on Thursday, October 28, 2021, via teleconferencing application, Zoom. The Talk Series is a virtual session for young Nigerians to exchange ideas and insights about life, relationships, technology, and finance, offering them informed opinions from experts and other experienced young professionals who are knowledgeable in various areas.

This edition, themed ‘Relationship, Love and Work: How To Juggle It All‘, will provide young Nigerians with the skills and information that will assist with combining a hectic work lifestyle with a healthy sex/love life. 

Akah and Claire Nnani, actor, and artist; Hannah Jonathan, Sex Therapist and Funmilayo Falola, Head, Marketing Communications and Investor Relations, Wema Bank, have been confirmed as speakers for this session. The event will also be moderated by multi-talented media personality and co-host of hit YouTube show, OffAir, Gbemi Olateru-Olagbegi.

The Nnanis will share more details about their partnership and speak about “Relationship and Work: Lines Not to Cross,” while Hannah Jonathan will discuss “Managing Sexual Depression and Embracing a Healthy Sexual Lifestyle.” Funmilayo Falola, will share insights from her personal and professional experience on “Juggling Finance and Relationship Decisions”.

Healthy work-life balance, especially during the pandemic, has been one of the biggest issues for young professionals across the world. The audience will have the opportunity to send in questions before the event using #ALATTalkSeries on social media or via the live chat option during the session.

According to a statement by Mrs Falola, “We are fully committed to encouraging young Nigerians to build meaningful partnerships while maintaining financial independence and developing their business skills. With the Talk Series, we are encouraging young professionals and other young Nigerians to discuss critical issues in a safe environment and find solutions with peers and other experienced minds.”

Akah Nnani, a Nollywood Actor and Youtube content creator, has starred in Nollywood favourites such as The Royal Hibiscus Hotel, Tinsel, Jenifa’s Diaries and Omo Ghetto The Saga. He is currently starring in a new ShowMax series, ‘Ghana Jollof’ alongside comedian, Basketmouth.

Claire Idera Nnani runs an independent design workshop in Lagos and teaches students. She has previously worked as a freelance fashion designer and illustrator and boasts of a robust portfolio with clients like Lisa Folawiyo, Zashadu, Refashion Africa, Grey Velvet, Hugo Boss amongst many others.

Hannah Jonathan is a certified life and sex coach whose goal is to help singles and couples find joy in sexuality and sensuality.

Funmilayo Falola currently heads the Marketing Communications and Investor Relations function in Wema Bank. She has over 16 years of experience in the marketing and communications sector and has held various managerial positions in different companies within and outside the sector.

ALAT by Wema has continually shown support for young Nigerians across the country through various youth-friendly initiatives, including a partnership with SociaLiga and other initiatives tailored towards the youths.

The company has also won numerous awards, such as the Best Digital Bank and Best Mobile App in Nigeria at the 2017 World Finance Awards, Best Digital Bank in Africa at the 2018 Asian Banker Awards, amongst many others.

Profitable business in Nigeria with little capital

How To Start A Profitable Business in Nigeria With Little Capital

The instability wrought on the Nigerian economy has led to an increase in the price of everything. Every businessman knows the chant of ‘everything is now expensive’ like a lullaby a mother sings to her sickly child; but the truth remains that there are endless possibilities to the businesses you can start in Nigeria, especially as a developing country where all you require is determination, hard work and a little bit of money.

Starting a business has always been known to be capital intensive. In times like this, when income remains fixed but the cost of living continues to explode, we are faced with a higher capital need to start the simplest businesses; after all, businesses thrive on the buying and selling of goods and services indirectly or not.

There comes the need to search out ways to start lucrative businesses that require little to no capital but can grow exponentially. This post seeks to provide a list of profitable businesses in Nigeria you can start with little capital, key steps, and processes of what you need to start a profitable business in Nigeria.

List of profitable businesses in Nigeria

How Can You Start A Profitable Business With Little To No Capital In Nigeria?

A house built on a mountain has a strong foundation. A business built on effective planning is bound to succeed.

1. Find a Business Idea.

To start a business, you must find or create a business idea relative to your available capital. Many nurture businesses for years that bring in insufficient profit relative to the stress and energy required to keep it up. When searching for a business idea, there are a few things that will serve as a guide;

  • Think about the problems in your locality
  • Can you provide a solution to such a problem and monetize it
  • Think about the execution processes: What will it cost you and how will you do it

Not all business ideas are worth starting at all. A business idea that is worth the effort must be unique, practical, needed by the market, and easy to scale.

ALSO READ: HOW TO OPEN AN ACCOUNT WITH ALAT

It is also possible that your business idea is completely new. So, what you then need to be certain of is your business offerings and pricing. You may need to ask questions from people, do your own research and as well seek advice from entrepreneurs.

2. Conduct market research.

According to Wikipedia, A business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them. It may also contain background information about the organization or team attempting to reach those goals.

Every business, whether big or small, needs a plan for that business. In starting a business, a business plan helps you to stay focused and organized. Remember organizational skill is one of the skills of a successful entrepreneur. Therefore, in writing your business plan, you check out some business plan samples online to serve as a guide.

Examine the current market for the proposed business.

  • Who are the possible clients of this proposed business?
  • Can I succeed in this business? Do I have the necessary skill to make this business thrive?
  • Will this business be easy to scale?
  • What is the necessary amount of capital that must be inputted into this business and do I have it?

Do not be afraid to drop business ideas when they prove dismal just because you’ve exerted too much energy and effort on it.

3. Create a business plan.

Every business needs a business plan in order to analyze its implementation. It may be unwise to have a business idea inspiration, acquire the necessary funds to bring it to life, and then go straight to its execution stage.

What is an effective business plan?

An effective business plan is a document addressing the following –

  1. The aim of the business/product to be sold
  2. Business growth plans
  3. Advertisement strategies
  4. Physical and or online presence only?
  5. Client basis
  6. Capital needed

4. Acquire business funding

Of course, the number one means business starters get funds is by bootstrapping which means scraping together all available personal funds and support funds from friends and relatives. Money from this source is usually not enough but must be the first resort.

The next method and the most usual means of getting funds are by obtaining loans. Loans can be daunting and it is advised that this would be a last resort except such loans have simple terms, If not you’ll be looking at a future of monthly payment build-ups that may eventually ruin the business.

You can consider taking WEMA Bank small business loans which have been tailored to meet specific business needs such as the WEMA Bank Pharma Loan which is tailored to help pharmacies and small drug store owners. Applicants can get as much as 5 million naira loans without collateral.

They also have the WEMA Medi Loan which targets private hospitals, clinics, and diagnostic laboratories. Applicants can also get as much as 5 million naira.

The School support facility loan is another loan initiative that is targeted at supporting the operations of educational facilities and applicants can get as much as 10,000,000 loans.

WEMA has also partnered with the Development Bank of Nigeria to provide loans to Small and Medium-scale enterprises at affordable rates with a five years tenor and up to 200m for SMEs and 720m for small corporations. 

These loan schemes are designed to make your business execution easier. Applications for these loans have been made easy.

5. Register your business

This is yet another important stage of starting a business in Nigeria. Every business operating in Nigeria has to be registered under the Companies and Allied Matters Act. Your business can be registered as a business name or a corporation, depending on its confirmation with the requirements of the CAMA 2020. It is advisable to consult a lawyer on the benefits of both and their suitability for your business.

6. Employment 

After registration, there’s the need to employ staff depending on what you want. If you think it is a small business you can run all by yourself, then do it. If not, consider employing a team that’ll address the various sectors of the business, all within a reasonable salary frame relative to the business’ profits. Research if there’s any need for professional advice or skill in your business.

7. Book Keeping & Accountability

The success of every business depends on its finances. It is a good idea to place yourself on a salary like the rest of your employees. If there are none, still do so. It helps you avoid indulgently and emergency spending. Separate your personal funds from your business funds and ensure you keep records of all expenses and incomes.

8. Open a business account

A business account will help your business be more financially capable. You çan place restrictions on the account to enable proper finance management. 

A WEMA business account is highly suited for this. It is an account created to target small businesses and can be operated online for ease of business. It is designed to help small businesses grow. It has a minimum opening balance of just 10,000 naira and has the full benefits a current account has to offer. Charge rates on this account are affordable at a monthly turnover.

It is also important to create monthly, quarterly, and yearly business reports that must be vetted by professionals, in order to keep you track.

In the long run, the idea behind starting a business is to have the financial freedom only a personal business can afford you and also to liberate yourself from the instability the economy imposes. You can start your business today with next to no capital and grow exponentially with the above strategies. 

You should take a step towards financial freedom today.

baking and confectionery business in Nigeria

How To Start a Baking and Confectionery Business in Nigeria

If you’ve ever considered starting a bakery business in Nigeria, gather here. The bakery business is a very lucrative business because it meets the daily needs of people. The food business is one of the fastest-growing industries in the world hence, considering a bakery business is not out of place.

If you have culinary skills and want to learn how to commercialize it to a large market, you are in the right place. Also, the bakery business is not only for people with culinary backgrounds. There are several people in the industry with no culinary skills and are doing remarkably well.

This article covers all you need to know about starting and running a successful bakery business. To start, you will need some planning and entrepreneurial knowledge, all of which will be covered in this article.

Before starting any business, it is important to have an overview of what you will need and the costs. A standard bakery requires a lot of startup costs when you factor in the equipment, materials, labor, and lease. Generally, when evaluating the startup costs, you should include the cost of the following:

  • Public Utilities
  • Marketing
  • Licenses
  • Lease
  • Furniture
  • Staff
  • Design and Repair
  • Equipment
  • Miscellaneous expenses

How To Start A Bakery Business In Nigeria

Step One: Decide The Type Of Bakery You Want To Open

The bakery business is broad and you will need to select a niche for yourself. There are bakeries that focus on the sale of baked bread, some focus on cake baking, some sandwiches, etc. You can either start a retail or wholesale bakery.

Learn about the two types of bakeries below.

a. Retail Bakeries

Most bakeries fall under retail bakeries. Just like the name implies, those operating retail bakeries sell baked foods directly to their customers.

Below are some of the retail bakeries you can select from:

i. Traditional Bakeries

These bakeries specialize in the baking of biscuits, bread, etc. For a place like Nigeria, bread is a fast food most people have in their houses. Starting the baking of bread alone can make you millions of Naira in Nigeria. You can make different types and flavors of bread; from coconut to butter or chocolate bread. There’s no limit to the level of creativity you can put into the baking of bread.

Also, you can make different types of cookies and they will sell because kids and adults love cookies. You can win anytime and any day with a traditional bakery if you can bring your creativity to bear.

ii. Specialty Bakeries

As the name implies, these types of bakeries focus on a particular type of baked food. A good example of such is cake bakeries. There’s hardly a day of the week without someone celebrating a birthday. And, there’s hardly a weekend in Nigeria without a party or celebration going on.

Over the years, we’ve come to discover that cake symbolizes celebration and most people want to get a cake for their events. Without mincing words, this is a very good niche with a ready-made market. Hence, this is a great way to begin your bakery business.

iii. Pastry Shops

Many people are looking for different types of snacks they can quickly grab in the afternoon. A delicious snack paired with a cold drink is refreshing.

Basically, pastry shops specialize in the baking of different types of snacks; meat pie, egg roll, chicken pie, puff puff, doughnut, sausage roll, etc. With little capital, you can get a brick-and-mortar shop and set your business up.

iv. Bakery Food Trucks/Van

You may have come across a bakery van at some point. So, rather than getting a brick-and-mortar store, you can get a van to sell different types of baked food such as bread, cakes, etc.

This type of bakery is lucrative because you are not stuck at a particular location. You can always drive your van to any location where you can find your target audience.

v. Home Bakeries

This is another type of bakery that is gradually gaining ground. In an era where every business is going online, you can carry out all baking procedures in your kitchen and sell them off online.

This is cheap to start because you don’t need to spend so much on setting up the business. The only thing you need is to purchase the needed ingredients to bake your delicacies.

vi. Bakery Cafe

This bakery offers more than just baked food. They go a little further to add coffee and tea to their offerings. Basically, a bakery cafe offers bread and other pastries with coffee and tea. In this type of bakery, there is a dining table where people can sit to have their meals.

b. Wholesale Bakeries

The wholesale bakery is another type of bakery and unlike the retail bakeries, they cater to a larger customer base. They sell directly to retailers who in turn sell to the final consumers.

Once you’ve chosen the niche you want to specialize in and the type of product you want to sell, you can then move to the next step.

Step Two: Register Your Business With CAC

The first step to structuring your business in Nigeria is to get it registered with CAC. Most times, unregistered businesses find it difficult to build trust with prospective clients. With as low as N20,000, you can get your bakery business registered with CAC.

Step Three: Draft A Business Plan

The next step is to draft a business plan that highlights the goals and objectives of the business and how to achieve them. Typically, a good business plan should contain the following:

  • Executive Summary
  • Enterprise Description
  • Product or Service Description
  • Industry Analysis
  • SWOT Analysis
  • Market Research
  • Financial Projections
  • Appendix

A solid business plan can help you secure funding from investors or venture capitalists

Step Four: List Out The Equipment You Need To Start Your Bakery Business

It is highly recommended that you have experience with baking before starting this business. Either you have been trained or have worked in a bakery. You cannot substitute raw knowledge in this business. Otherwise, you can hire someone who is trained in this field.

Usually, a bakery should have the following items:

  1. Mixers
  2. Oven
  3. Dough proofer
  4. Bakeware
  5. Refrigerator
  6. Wood Top Work Table
  7. Proof boxes
  8. Racks and baking sheets
  9. Sinks
  10. Flour Sifters
  11. Trays
  12. Miscellaneous

Step Five: Rent A Space For Your Bakery Business

The type of space you’ll need will largely depend on the type of bakery you are starting. For instance, if you are starting a van bakery, you’ll need to purchase a van and probably hire a driver for it.

On the other hand, if you are starting a home bakery, which is a good way to start, you may not need a large physical space other than your home kitchen. The online space and a delivery company will help to get your product to your customers.

But, if you are starting a traditional bakery or pastry shop, you can go for a commercial space. Rent a property and get the necessary lease agreement signed. Before signing your lease agreement, read through or get the service of a lawyer to ensure that whatever you are signing does not hurt your business in the long run.

In addition, choose a location that brings you closer to your target audience. A busy environment where there is high foot traffic is not a bad idea.

Other things you need to consider when renting a space include:

  • Accessibility to space
  • Demographics
  • Competition
  • Health regulations
  • Safety and crime rates
  • Size and space requirements
  • Proximity to customers and suppliers

Also, take note of the following when choosing a space

  • Your Bakery should be located far away from drainage and high pollution factories
  • It is a requirement for every bakery to have a cloth room where your workers have a change of clothes.
  • Your bakery should have a heat extractor to expel heat from the kitchen
  • Space must have a bakery, storage, and administrative section
  • You must have fire extinguishers and an emergency exit for safety purposes.
  • Your bakery should also have smoke detectors

Step Six: Research The Relevant Licenses, Permits, And Regulations

Running a bakery business is most times compared to running a fast-food company. Hence, the regulations can be heavy sometimes. Apart from registration with CAC as discussed earlier, you will need to register with relevant associations such as the Association of Master Bread Bakers (AMBB) in your local government area.

Also, a thorough inspection of your location will be carried out by the Association of Master Bread Bakers and The National Agency for Food and Drug Administration and Control (NAFDAC).

Usually, the inspection and approval of NAFDAC take between 6 months to one year but the Association of Master Bread Bakers is continuous for as long as the bakery exists.

Additionally, you’ll need to provide the details of your suppliers to
NAFDAC and AMBB because they want to ensure you are using standard equipment for your productions.

Remember to research if there are other regulations aside from the ones mentioned here. This will mostly depend on your location.

Step Seven: Hire And Train Staff

The size of your bakery will determine the number of staff to employ. If you are running a standard bakery, for instance, you may need to employ a front-end personnel that will accept orders, then two or more persons that have formal training or bakery experience to oversee the actual baking.

In addition, you may want to hire some personnel to handle the dishwashing, mixing of ingredients, product packaging, and other menial jobs in the bakery.

Step Eight: Market And Grow Your Bakery Business

The aim of every business is to grow and remain profitable. There is a need for a good marketing strategy if you want your business to be discovered by prospective clients. Both new and existing businesses need solid marketing plans to survive.

While drafting your business plan, you must have done your market research and this should serve as a guide for you to follow. Additionally, there are marketing agencies whose job is to advertise your business to your target audience.

But, if you cannot afford a marketing agency, you can attract your prospective clients through these tested and trusted channels.

  1. Word of mouth marketing
  2. Social media advertising
  3. Sharing of flyers, handbills, and posters
  4. Pay-per-click marketing
  5. Email marketing
  6. Website
  7. Referral/affiliate programs
  8. Reviews/testimonials collation
  9. Get listed on relevant directories

Threat To The Bakery Industry

1. People Are Becoming More Health Conscious

We are in an era where consumers are beginning to be more health-conscious, and many are demanding more gluten-free, low carbohydrate, whole grain, and organic foods.

Many are substituting baked goods with nuts, yogurt, and fruit bars. Hence, bakers should factor these into their plan. You can have a section for healthy baked foods for health-conscious people or those watching their weight.

2. Profit Margin May Be Low

Another threat is that the profit margins are often quite small. When you consider the labor and utility costs of running a bakery, there is a possibility that your profit margins on some products could be under 5%.

3. The Cost Of Ingredients Is High

Baking ingredients are quite expensive and you’ve got to purchase these ingredients before any baked goods can be produced. Meanwhile, there’s no guarantee that you’ll sell all of your baked goods every day. This is why intense marketing is a necessity in this line of business.

Advantages Of A Bakery Business

1. High Traffic Locations Can Make For Easy Profits

If you can succeed in choosing a good location and can bake delicious food, you are halfway to making huge profits. The aroma of baked food can make anyone feel hungry and subsequently stop buying.

2. You Can Start Out From Your Home

To start a bakery business, you don’t necessarily need to own a space. But, you will still have to adhere to regulations and get your license. However, starting from home will allow you to save some money and start with lower startup capital.

3. It Is Easy To Gain Customers

Practically, if people try your baked food and they enjoy it, they will return and also tell others about it. As more and more people try your baked foods, the more your customer base will keep increasing.

In conclusion, it is no hidden fact that the bakery business is one of the lucrative businesses anyone can start. Needless to say, the demand for baked products will always be on the rise, and so will the need for bakeries. If you are interested in starting a bakery business, the best time to start is now!

Meal Ordering Business in Nigeria

How to Start a Meal Ordering Business in Nigeria

The Meal Ordering business in Nigeria is a service-rendering venture. It entails the delivery of foods and the likes to a customer either by a restaurant, and or independent food delivery outlets. Such orders are made either through the customer telephone, the website of the food venture, or a custom-designed app.

The items to be delivered range from African dishes, Continental dishes, drinks, desserts, or snacks and are typically delivered in food containers, boxes, or bags, which are mostly delivered using a car, bikes, or scooters.

The opportunities inherent in the Nigerian meal ordering market are ever-increasing. This is due to the fact that food delivery is a business that is well known and very easy to start and run successfully. This is a sure-meal ticket venture for any aspiring entrepreneur looking for a business to start with assured returns.

Customers usually, depending on the delivery venture, chose to pay in person or online with cards.

Types of Meal Ordering Services

1. Independent Vendor: This is like entering into a partnership with different restaurants to provide food delivery services independent of their operations.

2. Personal Restaurant: This involves only your restaurant and menu, you could be delivering lunchtime, seminar, and corporate parties order.

3. Liaison With A Known Restaurant: This involves operating your delivery services exclusively with a particular restaurant.

Profitability Of Meal Ordering Business in Nigeria

It is a known fact that more than half of the population in Nigeria are made up of working-class people, coupled with the heavy traffic condition in places like Lagos and Onitsha, these people barely have to cook themselves, this makes food delivery service a very profitable venture for smart individuals.

On average, you can make up to two hundred thousand nairas monthly profit as people don’t have time to leave their office or places, especially during the rainy season.

The Market Demand For Meal Ordering Business in Nigeria: Competition and Opportunities

Food Businesses cannot be affected by economic hard times. This is because regardless of the state of a person’s pocket situation; buoyant or broke, he must eat, People must get hungry and eat.

In Lagos, a state in Nigeria that has an average population of over 25 million residents, most working-class people rush out as early as 4:30 a.m in order to beat traffic on their way to work and will not come back until late at night around 11:00 p.m. because they got stocked in traffic.

This set of people now depends on the service of a meal ordering company to meet their nutritional needs. The biggest advantage of this business is the low investment.

However, due to the fact that you are just starting up, expect stiff competition from the big names already in the market but arming yourself with the right plan and attitude will give you’re a smoother running of the venture.

How to Start Meal Ordering Business in Nigeria

If you wish to start a meal ordering business, these are the steps you need to take to start your meal ordering business in Nigeria.

Source for Startup Capital:

Meal ordering service is not an expensive business to start up, you can start with just N60,000 this only includes the food preparation aspect, this is referred to as your Startup capital and you can get a small business loan.

Choose Location:

You need to locate a good environment where you can start your meal ordering service, specifically; a metropolitan area with a high profile record is the best place to start a meal ordering service.

Create A Brand Name And Logo:

let the name reflects on-time delivery of food and also be catchy. it is necessary that you have a nice business name and logo.

Register Your Business Name:

The next step is to register your business with the Corporate Affairs Commission (CAC) to avoid government sanctions and harassment.

Get License:

Get a license from the health department, when it comes to food or any intake, there are some regulatory bodies in charge of issuing licenses for this business, in you are starting big from NAFDAC under the federal ministry of health.

Set Your Price and Payment Method:

There is a flat rate fixed mostly for the delivery of food according to your location, you can also model your own price towards this so as to be able to survive the completion. There are different options for the payment method; this can be Pay on Delivery, POS, Bank transfer, or InterSwitch.

Accounting

You need to be deliberate about managing your finances else the business may collapse. Managing your customer details, who have been invoiced but yet to pay, who has paid, who are you paying etc needs to be properly managed and documented using a tool like invoicemonk.

Choose a Transportation Model:

They include; bicycles, motorcycles, and minivans for long-distance.

Management

This covers staffing and advisers for Meal Ordering businesses in Nigeria

Staffing:

You must have experienced and skilled employees for a smooth running of the food ordering business, these include those preparing food, delivery, order taking, bookkeeping, invoicing, and cashier.

Advisers:

Advisers here include the industry experts that have been in business for a long, also including the Supplier of the raw materials for the meal, Major company receptionists, and casual staff of the organization you are intending to deliver to.

Marketing

Let us now consider how to market and boost the profitability and sustainability of the Food Ordering Business in Nigeria.

Advertisement Strategies:

Below are some of the available options you might use

  1. The best way to promote your business is by client satisfaction. Let your clients refer their friends to you.
  2. You can also advertise by sharing leaflets, flyers, and business cards.
  3. For an office meal delivery business, it is best to meet your customers personally.
  4. Create an online ordering shop to simplify the process, cover more ground and gain more customers who may not even know your brand before – Set up a website for people to order their meals. You can do this by hiring a website design agency or individual.
  5. Additionally, employ outdoor advertising methods such as the erection of billboards at strategic locations. This has a highly effective offline advertising conversion rate.
  6. Maximize upon the potentials inherent in social media management and paid advertisement for your business
  7. You can also brand your transport mode with your brand name, logo, and contact details.

Profitability/Sustainability Tips for Meal Ordering Business in Nigeria

  1. You need to always make your customer happy by providing quick service; this will make them feel safe to eat the meals you have brought for them.
  2. Avoid lengthy delivery time; get a motorcycle for densely populated traffic.
  3. When it comes to wrong orders, Have an accurate order-taking system and double-check via for confirmations before alerting restaurants.
  4. When it comes to cancellations, If the error is from your side, offer a full refund and possible discount on the next order.

Summary and Conclusion:

These are some important things to know when starting a meal ordering business in  Nigeria,  They do not guarantee success but will place you on the right track. Wish you all the best in your business, feel free to leave a comment