May 13, 2021

Coin Tastic

Business Managements for you

Business Consulting Certificate

In Leadership 2030, Georg Vielmetter and Yvonne Sell provide a road map of the broad...

In Leadership 2030, Georg Vielmetter and Yvonne Sell provide a road map of the broad trends that are reshaping markets, cultures, and companies. Potential Nigeria entrepreneurs go through many hardships when trying to access credit for their businesses. Though there is a wide range of financial institutions that offer business loans, they usually charge high interest rates deterring aspiring entrepreneurs. For instance, major banks have pegged their lending rates to as much a 28{e914618a5d19142cda31f224a9ba65a9421c7ce8515f50778fb51726ae3f9c6f} deterring potential entrepreneurs who are mostly low income earners. Other obstacles faced by our entrepreneurs include severe collateral conditions set by banks and other lending institutions. Though our government through the Central Bank and the Banker’s Committee came up with guidelines requiring banks to set aside 10{e914618a5d19142cda31f224a9ba65a9421c7ce8515f50778fb51726ae3f9c6f} of their profits for funding MSMEs, majority of these banks have been reluctant to do so. This has led to the emergence of micro-finance institutions which though helpful are not sufficient for meeting the financial requirements.

The figure below shows the vastly different impact of startup rates on innovation and technological development (as measured by patent applications) across countries. Only rich countries can expect more business management to result in more innovation, says Dr. Anokhin. For the lesser developed countries, as the plot demonstrates, an increase in startup rates will only lead to less, not more innovative activities. The problem, according to Sergey Anokhin, is that developing countries often look up to the leading economies when trying to design their own policies. Moreover, quite naturally, the very textbooks that the students across the world use, are written by the scholars from the world’s leading countries, and do not take developing economies’ context into account. Taken together, it often locks policy makers in assuming the relationship between entrepreneurship and innovation that will not hold in their particular parts of the world. The pro-entrepreneurship policies will not bring about the effects expected, and the limited resources will be wasted to support activities that are largely detrimental.