‘Knowledge gap of funding cycle hindering SMEs access to funds’
C.G OKOROMA is the founder and chief executive officer of Call Bob Nigeria- a car rental and Vehicle Company. In this interview with JOSEPHINE OKOJIE, he spoke on the transportation industry and Nigeria’s entrepreneurship ecosystem.
How would you assess the Nigerian transportation industry in the face of the new normal?
No doubt, the Nigerian transportation industry was badly hit by the novel Coronavirus outbreak. More interesting, this has brought about some interesting activities across the various sectors: land, rail, aviation, and water transport.
Call Bob Nigeria is currently in the land transportation sector of the Nigerian economy, and we have been noticing some interesting trends in our sub-sector. In business, what is permanent is change, and this change can either bring about famine or feasting depending on how you react. For us in the vehicle leasing sub-sector, customers are struggling to keep the operational cost down while executing government and/or oil and gas projects across the region. They are running away from huge capital expenditures or long-term contracts because of the uncertainties in the economy.
These companies are running to us for short-term engagements to fulfill their contractual obligations without putting their safety and quality standards at risk. We would say these are the new normal but I think it is too early considering how change evolves with time. These changes could be temporal or permanent depending on factors such as a successful COVID-19 vaccine.
To what extent will you say COVID-19 has affected your business, considering the fact the transportation industry was badly hit by the virus outbreak?
The ability to detect and immediately develop a suitable response to changes in business determines if you take advantage as a first mover or become a laggard. The disruption in our business was unprecedented. Things were happening so fast beginning in March 2020. Customers were defaulting on payments, projects were going through serious financial challenges, implementing new COVID-19 safety protocols, state border restrictions, and many more issues. We had to respond promptly to these issues without threatening our long-term strategy as a business. Looking back, these adversities strengthened us and reinforced our relationship with our stakeholders – employees, customers, and management.
Have you had to re-define your business model owing to the pandemic impact? If yes, how?
Sure! We have made some slight re-defining especially in the area of technology adoption. Call Bob Nigeria is on the road to becoming a technology-driven company. We are executing an aggressive plan to fully digitalise our processes – operations, procurement, finance, marketing, and sale. This will become a crucial part of our competitive advantage soon. More so, we are now operating as a platform to integrate vehicles of individuals and other companies into our fleet. Leveraging on the Call Bob Nigeria business know-how, individuals and companies can now have an income-generating vehicle working at a project site.
You currently operate only in Rivers State. Is there any plan to make an entry into the Lagos car rental market?
Call Bob Nigeria has a market penetration strategy plan covering the Niger Delta, Northern and Western Region. We have been developing the Niger Delta region which includes Abia, Akwa Ibom, Anambra, Bayelsa, Cross Rivers, Delta, Edo, Enugu, Imo, and Rivers State. So far, execution has been flawless from our regional office in Port Harcourt.
Lagos is in our Western Region strategy plan. The market intelligence we have gathered suggests that the offerings will be slightly different from the demand in the Niger Delta region.
Has Call Bob Nigeria partnered with any local vehicle assembler to supply vehicles for its car rental business?
Partnerships are an important ingredient in our success story. We have visited some local vehicle assemblers, and the conversations are still on-going to supply vehicles for our fractional ownership programme. Call Bob Nigeria offers a financially prudent way to own an income-generating asset. We buy new or good grades vehicles as fast as we can have fractional owners that are willing to pay for them.
As an SME operator in the country, in what way do you think Nigeria can grow its entrepreneurship?
The administration of President Muhammed Buhari is doing a commendable job in growing the number of SME operators in the country. Call Bob Nigeria is benefiting from the various policies, most especially the new finance bill geared towards making it easy to do business. The government has displayed its commitment to stimulate entrepreneurship, the private sector needs to respond with access to finance, business education, and other incentives that will further buttress our president’s ambition.
Despite a lot of funding available for entrepreneurship development in the country, why is it still difficult for small businesses to access most of these funds, especially from deposit money banks?
Indeed, there are many funding options available for entrepreneurship development. However, the number one challenge inhibiting some entrepreneurs is the lack of knowledge about funding cycling. In an entrepreneurship journey, you start by funding your idea, before getting support from family and friends. Then you get access to grants and angel investors who help in refining and validating your business idea. There is a lot of learning and business development at each stage that will make the business attractive to potential investors – deposit money banks.
Deposit money banks are in the business of holding money for the public, and lending to worthy businesses that will repay the loan with interests. It is important to stress the importance of “worthy businesses,” because some small businesses have not satisfactorily packaged their business to be investment attractive. Deposit money banks invest only where their principal is safe and can be reclaimed with a fair interest.
What is your outlook for the transportation and logistics industry?
The disruption brought about by the novel coronavirus pandemic will further stimulate the adoption of technology in the industry. More companies like never before will turn to technology to drive efficiency and reduce operating costs. More so, the prevalent high-interest rates will delay the purchase of new assets. Companies will turn to fairly used assets to meet demand in the near term. Hopefully, we can start seeing some crowd-funding activities to drive business growth.