Startups in Nigeria face a myriad of challenges, and one of the pivotal aspects they grapple with is compliance with regulatory frameworks.
Understanding the importance of adhering to policies and regulations, particularly for startups, legal experts delved into illuminating insights during the U-Law Black Friday 7.0 event.
Their guidance underscored the pivotal role compliance plays in not just following rules but fundamentally impacting a business’s trajectory toward success or failure.
The event, themed ‘Why Are Startups Failing: Building a Strong Compliance Culture’ witnessed a robust panel discussion moderated by Kelechi Ibe, a senior associate at UUBO.
The panelists, comprising seasoned industry experts representing various startups, passionately underscored the challenges that young ventures face and the paramount importance of fostering a robust compliance culture as an integral part of their business strategy.
“Compliance is not merely about ticking boxes; it’s the bedrock of trust-building with customers, averting punitive fines, and securing investor confidence,” emphasised one of the legal experts who shared insights at the event.
The discussions and insights became even more pertinent following the Central Bank of Nigeria’s recent revocation of licenses for 179 microfinance banks (MfBs), three finance companies and four primary mortgage banks (PMBs).
This drastic measure was a result of these institutions’ failure to meet regulatory standards and comply with stipulated guidelines, according to CBN.
Discussing the aftermath of these actions, Tosin Osinbodu, CEO of Chaka, highlighted the dire repercussions non-compliance could inflict on businesses, urging a keen focus on adherence to avoid such pitfalls.
Throughout the discussion, the speakers stressed that compliance isn’t a one-time checkbox exercise but a continuum that startups must embed in their DNA right from inception.
They drew on real-life examples, especially from startups that encountered regulatory roadblocks due to compliance lapses, emphasizing the need for careful navigation and ethical considerations.
Also, Adetola Adeleye, First Ally’s head of legal, underscored the significance of tailored and scalable compliance strategies.
She emphasized that compliance isn’t just a legal formality but a pivotal factor in instilling trust among customers and potential investors, an aspect indispensable for startups seeking financial backing.
Nissi Madu, managing partner at Co-Creation Hub Limited, echoed these sentiments from an investor’s perspective.
Madu emphasized how stringent compliance mechanisms could significantly mitigate legal risks, ensuring a startup’s long-term viability and attractiveness to potential investors, thereby fueling market expansion and business sustainability.
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“Compliance practices serve as a reflection of a startup’s financial integrity, significantly influencing investor decisions during the due diligence process,” Madu said.
In essence, the insights and deliberations shared at the event illuminated the pivotal role of compliance, painting it as not just a regulatory requirement but as a cornerstone in establishing a robust, enduring, and prosperous business.
The guidance offered aimed to equip startups with the knowledge and strategies to navigate the complex labyrinth of regulations, fostering a culture that doesn’t just meet standards but propels long-term growth and success.
