‘Lagos to create 600,000 jobs in 2021 through the LSETF initiative’
CHARLES ANYANWU is the director of strategy, funding, and stakeholder management at the Lagos State Employment Trust Fund (LSETF). In this interview with JOSEPHINE OKOJIE, he spoke on how the Lagos state government is creating an enabling environment to generate opportunities for jobs and wealth creation.
Can you give us an overview of what the Lagos State Employment Trust Fund is doing to generate jobs and reduce youth unemployment?
The Lagos State Employment Trust Fund (LSETF) was established by The Lagos State Employment Trust Fund Law 2016 to provide financial support to residents of Lagos State, for jobs, wealth creation and to tackle unemployment. We aim to enhance the creative and innovative energies of all Lagos residents and reduce unemployment across the State. This is done by focusing on promoting entrepreneurship by improving access to finance, strengthening the institutional capacity of MSMEs, and formulating policies designed to improve the business environment in Lagos State. So far, we have supported over 11,500 small businesses in Lagos State and created more than 100,000 jobs. We currently operate three programmes namely; MSME Loan Programme: Our Loan Programme provides access to finance and business development support (Capacity Development, Market Access, Mentoring, Promotions) to for Small and Medium Scale Enterprises (SME), Micro- Enterprises (ME) and Micro – Enterprise Startups (MES) beneficiaries with a maximum value of N5million, N500,000 and N250,000 respectively.
Lagos State Employability Support Project plans to increase the pool of skilled manpower to alleviate the acute shortages of employable labour in Lagos. The project will improve the quality of labour in several sectors including; construction, manufacturing, healthcare, hospitality, garment making, and entertainment amongst others.
Also, Lagos Innovates is a dedicated platform that refers to a set of programs that provide support for the exciting and fast-growing start-up ecosystem in Lagos State. Lagos Innovates is designed to assist founders and start-ups by facilitating access to high-quality workspaces and infrastructure, learning, early-stage investment capital, and investor and peer networks. Programs are open to all innovation-driven enterprises that are less than three years old and based in Lagos state.
What impact has the programme had on the youths in the state?
So far, LSETF has provided training opportunities to 6,095 young persons in diverse sectors and has placed 3,054 of them in jobs. In 2020, we onboarded over 35,000 youths on Coursera training platform. Our Lagos Innovates Programme has provided workspace vouchers to 127 start-up businesses and has provided 18 students with the opportunity to be trained in technology skills (7 have been placed in jobs)
How much has the LSETF spent so far in funding entrepreneurs and how many youths have gone through your training programmes?
LSETF has spent approximately N7.4 billion in funding and support for entrepreneurs through our loan programme. We have also supported 6,095 young persons with our training programmes.
Apart from providing finance for MSMEs, in what other areas is LSETF supporting small business operators in the country?
Driving Equality through Gender Inclusion: Women represent over 50percent of the total number of programme beneficiaries. Business Advisory and Support: LSETF periodically organises various business advisory initiatives including legal clinics, basic business skills, accounting, and book-keeping clinics among others. LSETF as a research and knowledge development information hub: LSETF has created an active learning centre that includes articles, infographics, presentations, blog posts, and videos to educate business owners and individuals on topics centered on entrepreneurship and employment. The learning centre is situated on the website page and is shared on all social media platforms (Instagram, Facebook, Twitter, and LinkedIn).
LSETF as an Intermediary between MSMEs and Government Authorities: We investigate policy issues that affect small businesses, intervene and mediate on their behalf with Ministries, Departments, and Agencies (MDAs) at the State and Federal level. LSETF also prepares periodic policy documents and recommendations for MSME intervention geared at boosting wealth creation and employment in Lagos State. Promotion of LSETF beneficiaries: LSETF sponsors its beneficiaries to trade fairs and conferences to showcase their products and services. Over 42percent of LSETF beneficiaries have attended at least one promotional event. Businesses are also promoted on our social media platforms regularly.
LSETF Community Outreach: LSETF operates in 26 LG/LCDAs within Lagos State providing grassroots engagement and education across unserved communications in Lagos State. Radio campaigns in English, Yoruba, and Pidgin have been aired to provide awareness and education about our programmes.
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?
Small businesses still find it difficult to access funding due to the following reasons;
Bad Credit: Credit history is one of the first things that lenders will review when going over a business loan application. A good credit score proves that the business owner has properly managed their personal and business finances by avoiding bankruptcy and making all their payments on time.
Weak Cash Flow: Financial institutions are very concerned that businesses have enough cash flow to make monthly loan payments in addition to covering their payroll, inventory, rent, and other expenses.
Time in Business: Many businesses also experience difficulties applying for loans because of their length of business operations and inexperience. Most lending institutions require businesses to have been operating for at least three years.
Lack of Collateral: Also, no available collateral is often a reason for loan rejections.
There have been a lot of complaints from most money deposit banks that several small business operators in the country do not have the basic requirements to obtain a loan. What is LSETF doing to address this major challenge?
LSETF has eased the loan application process for MSMEs by requiring no collateral and using guarantors as an alternative. We have also ensured affordable interest rates (below 10percent) for MSMEs in Lagos State with tenure of 12-36 months (depending on the loan category).
In terms of funding entrepreneurs and start-ups, what plans are you set to achieve by the end of 2021?
In 2021, we are set to achieve the following plans as follows; to create an additional 100,000 direct jobs and 500,000 indirect jobs, generate 200,000 new taxpayer registrations through our programmes, provide over 400,000 new interventions offered to support businesses – Interventions include loans, off-takes of trainees, mentorships, market access, business support services, provide 100,000 individuals with training opportunities and provide 25,000 individuals with job opportunities, and provide 200 workspace vouchers for start-ups.