 Experts say the top three areas of growth opportunities for SMEs in the country are access to training and development, which is 95%, digitising business, which is 93% and access to metadata, analytics and insights, which represent 89%. My guest, Darlington Onyagawa has a diverse work experience in various companies and roles. He is currently the co-founder, CEO of Aladdin Digital, an app that supports Africa's economy by providing an ecosystem of solutions for gig workers and SMEs. Prior to that, they founded an advice blacklisting and alternative database for chronic debtors and fraudulent individuals reported by verified online lending firms in Nigeria. Darlington also said that the MD of Ocash Nigeria under Oprah Software AS where they handle business development, product development, strategy formulation and execution, and people management. Thanks for joining me, Darlington on Business Insight and Plus TV, Africa. Thank you for having me. Good morning, all of you. Let's just get straight to the business of the day. Now financial experts say about 80% of small and medium enterprises in Nigeria fail within the first five years of their existence due to the lack of experience and other wrong business practices. First of all, would you agree with this position? Okay, I would agree with it partially, but be the business man myself. I will tell you that some of the challenges we have is that the economic conditions in Nigeria is quite unpredictable. Imagine if you start a business two or three years ago and you have some financial assumptions, you have some assumptions and make some projections on the amount of revenue you are going to make, the customer base you are going to get, and the profits you are going to make in the next five years. Well, things are changing rapidly in the economy. Just imagine that the matter has developed by almost 40% in the last few months. The cost of fuel has almost quadrupled in the last few months. How do you account for such unprintable changes in the macroeconomic conditions in the country? How do you factor in those changes into your projections? Beyond just the fact that a lot of SMEs are doing a lot of wrong practices in terms of the way they manage their business, the inability to separate their own income from the income of the business or what they call cash flow, the personal cash flow from the cash flow of the business and other unhealthy practices that SMEs do in terms of corporate governance and all the rest, but the stark reality is that they are actually fighting a Hackelian tax. It is the Hackelian tax of trying to balance your assumptions when you are going into your business with the stark reality that is facing a limited purchasing power of even your target market. So for example, as you are targeting the new income people, your product, your plan was targeting the new income people, that particular sub-sector of the economy or that segment has shrunk in the last five to six months, in the last one or two years. So the challenges are not just about the individual business owners themselves, but the reality somewhere. And number two issue is that most of the business that we manage today are not painkillers. So when you design or launch a product that is actually meeting the wants or not the needs, you begin to have problems. Now because of the limited purchasing power of the target market, both the mass market and the new income people, you realize that most people are not gravitating towards using the scarce resources that they have to solve their current needs, not their wants. All right Mr. Onyador. The average man, you may actually go out of business with time because your business, so these are some of the issues that actually affect businesses. What is your problem and you solve it? What solution are you bringing to the issues that matter most to the average Nigeria? If you can solve your problem, your business, you don't need so much marketing, what of math will spread your business? And your business has a more likelihood of surviving than when you actually meet with a business that's going to solve immediate needs, addresses the wants of people. I'd like to get to that. All right, fine. I'll get all of that. But oftentimes the issue of finance and funding, I always mention when we talk about SME growth and development, it won't challenge if you look at it conversely, because over time we've heard that they always have the finding difficult to access and funding and the right finances to grow or to scale up their businesses, what with the whole issues of inflation and microeconomic issues where the central banks are interest rates hike and all of that. So in the wake of all of this, bearing in mind all that we have in the country, do you really think their alternative sources of SMEs can naturally get in terms of funding and judging by the fact that most banks would give you Hekulian lists to fulfill before they can actually give you credit? Okay, yeah. I've been in the lending space myself. I mean, I've been in the lending space for a while, starting from the fund dynamic back. The dynamic back is the access back. I mean, dynamic back was one of the power near risk takers. When it comes to SME, I mean, they had a product demo when I was in Diamond Bar, who were giving those to a lot of SMEs and the bank actually bounced their fingers. But some of these guys, where you are going to do due diligence in your shop at a lab or any of these shops, where you're trying to do inventory, you're going to take stock of the inventory, what products they have in your shop. So you can know what amount of money you're going to give to them. They do a lot of sharp practices. They take inventory from your friend's shop and put it in their own shop. So when you come, you overvalue their current products or inventory and then you give them 5 million or 10 million and they use that money to go and get married to a second wife or use the money for something else. So the bank actually lost billions or millions of money in that process. So the SMEs, they still have a lot of health issues. Even for banks like EcoBank and Diamondback, who then is trying to take that risk in order to stop SMEs in any way we can. But that's beside the point. The truth about the matter is that some of the financial data that SMEs are providing to get loaned, banks cannot actually rely on those data. Either they are not correct or those assumptions that I said earlier are not tenable. They are not legal sustainable. The cash flow that you are projecting on, you can't even get that same cash flow to bring back the 5 million error when they go to you. So it becomes difficult. So what is happening now is there will be a lot of fintechs in that space. Some fintechs are not bringing that alternative data, scoring models. Who is the means to score SMEs, to provide them with facilities. But some of the interest rates are injurious. But you cannot blame them because some of these are unsecured loans. And if I give you a 2 million error unsecured loan, I have to ensure that the rates, you know, provides, you know, why do those rates go so hard? Which is to ensure that the SMEs that pay back actually pay back part of the capital of those SMEs that fail to pay back. So that's why please, also these fintechs, they are termed loan sharks. But they are trying to hedge risk. They are trying to hedge their risk to ensure that, you know, they actually get back part of their capital. So the fintechs are really able to give me loans. I know a lot of them, a lot of Uber apps today that can give an SM500,000, one million, five million error, they are available if you can meet some of the basic criteria. So those are the only ways I see today that SMEs can actually have beyond the government. You know, you have Bank of Industry, you have other government agents that are actually giving loans. I've had testimonies from people that say they actually got loans from Bank of Industry and I was surprised. So if you're not aware of it, they are feeling good. Approach them to a business plan and it will make sense to them. All right. All right. We'll try and reconnect with Darlinton in the course of the show. But sometime in June this year, President Tinopu also announced that the federal government was going to support a 75 business into about 75 billion credit. I'm glad to have you back and Darlinton. We lost you at some point. Okay, still talking about a digital lender. So it's a good thing that technology, you know, has actually come to bear or come to play in terms of the growth of SMEs. He also talked about how they've been trying to bridge that gap, you know, that's been created for funding. But they also talked again about how they similarly give injurious interest rates and they are acting like loan sharks. So how do SMEs protect themselves knowing fully well that they can really get from the mainstream financiers and, of course, these digital lenders. So the other thing is that when it comes to the principles of credit, all right, credit is given to enjoy lower interest rates when your business is sound, all right. You're keeping the right data. If you look at your bank statement, there's a little sense of corporate governance around your business, all right. Your cash flow is intact. And over to your credit score. People think that all these lenders are not stupid. All these lenders are integrated to at least two, at minimum two credit volumes. And they ask you to go to check your, check you out on the credit volumes, and then you have a standing bonus there and there. Even if they're going to take a risk with chance on you as an SME, the risk is going to be too high to reflect your kind of type of risk. All right, we'll take a break and we'll come back and try and reconnect with Tom Dahlinton in a moment. It's still business insight and plus TV Africa. Don't go away. All right, welcome back. Welcome back. It's still business insight and plus TV Africa. We're looking at SME's development and growth. We're looking at funding financing and payment options and we have Dahlinton Onyagura with us. Thanks for staying with us, Dahlinton. Thank you for having me. All right, we're talking about payment and options and payment channels. And the omnichannel payment seems to have a broader about growth and opportunities for businesses generally. How can SME's play in that light? Okay, the truth about the matter, like I said yesterday in the first show is that Nigeria has an advanced payment system, all right, funding compared to some of the European countries and some countries in North America. So when you come to local payments, I don't think SME's really have a problem. Today, you enjoy instant payments, which means you can get paid as a business. If you're a vendor to a bigger business, you can get paid once your invoice is approved. You can also make instant payments to your business partners, your employees and other stakeholders. So I think in the area of local payments, I think Nigeria is largely covered, you know, and there are other innovative payment methods coming up. You have access to the POS terminals. The area of challenge now is that they want this global, all right? So which means that even as a small business today, you're actually playing in the global stage, which means at the wake of the pandemic, that's what they call remote work. I have people that are working for me there in Canada, but they're working for me as a Nigerian company. So there are a lot of businesses. So you can be an SME, and then you're actually, you know, providing services, all right? You know, to companies abroad. How do you get paid, you know? People are actually providing services for you from Rwanda or Kenya or other African countries. So when it comes to payments, to be a payment, it's becoming a global phenomenon. So what we need now are platforms that can help you manage your effects risk. All right, so I want, I need dollars to pay somebody in the United States. I want to pay somebody in China as a business. So there are platforms that do that, you know? And we're moving away from the black marketers, you know, where to do this things manually. You know, having to, having three texts that can actually help you make those payments through a mobile app or a web app. So these are, these things are actually improving your ability to play in the global stage. So where you can stay now, there are platforms that allow you to, and people like my company, Aladdin Digital, that's what we're actually building. We are building a Pan-African payment platform for all payments in Africa, all SMEs in Africa. So we have one single platform where SMEs across Africa can sign up, you can do your KYC and then you can receive payments in your preferred currency. So whether you're a Kenyan or a Rwandan or a Ghanaian, you will get your payments in your preferred local currency. So because we know that that is the future, where all Africans can play locally and also play globally at the same time. So Africans can start taking advantage of these free-take innovations in the area of global payments. You know, because local payments across Nigeria is concerned, is largely taken care of already. All right, very, very interesting. But then there's this school of thought that believes that a good product will actually sell itself, but most people might tend to agree that still, even if it's good, people still need to know about the product in terms of marketing and giving it visibility. So I want you to talk to us about branding and the marketing and how SMEs can actually play as well. That's a very fundamental question. Because sometimes people are looking at my business and I get a lot of calls, a lot of emails from investors abroad and different people because they seem to have been able to build up a brand on social media or LinkedIn, on Facebook or Twitter. Most of these SMEs call an idea of doing a business. But the reality is that today, people go to check you out online before they go do any interactions with you. So your brand is very important. All right, and this is not too expensive to set up your brand. You can have one of your staff who is actually at the level of young people they're in their 20s and they're at that on social media. They can help you create a very visible brand online because everybody, even if they want to invest in your business, they want to partner with you. They go to check you out on LinkedIn, they check you out on Facebook or Instagram. They want to see what you're doing. So branding is extremely important. And then, I don't want to talk more about what we are doing, but there are a lot of, there's something that's actually missing today in the brand aspect of Nigeria and Africa. It's called the Brand Perception Index. Because there's no Brand Perception Index, we have to measure what they call Brand Perception and Sentiments of the populace about your brand. How your brand compares to your competitors in the same industry. People don't think their brand is extremely serious. So that's one of things we are doing and we're going to be monitoring the Brand Perception Index. We are on a daily basis, you can see the value of every single brand in Nigeria across different industries, like FFCG, Health, Finance, Insurance and Co. We can see the top 10 brands. So branding is becoming important. Even in America, there are databases where you can see the brand equity of every brand, the level of brand equity of every brand. So we are actually going to all these Sentiments. These are very simple. Make sure you have a very strong social media presence. It's not expensive. There are a lot of young people who are going to offer you that service for $5 or $10. And this is what is actually necessary. If people want to take you serious, they check you out online and it's quite inexpensive for you to drive a very big brand on social media. As we go down into the in just some 30 seconds, can you just tell us about the prospects for SMEs in the next five years in Nigeria, bearing in mind technology and fintech and all of that. Thank you very much for that. Before I go, there's a different between SMEs and startups. I had a talk on this last year that we need to invest there. I was telling them, most of the startups you don't want to actually get funding. You can see that most of the startups are getting funding. In 2021, over $2 billion came into Nigeria to get some funding. SMEs are not getting funding because they are not actually developing themselves into a startup. The key difference is that a startup is designed to grow very fast. While an SME is actually growing very slowly. So most of us don't understand how to bring that job. All the friends, guys that does a $10 billion won't be turned over in this business in any state. We actually called, we had one become a startup. There's been an SME for about seven minutes. So you have to bring that job from being an SME to being a startup. There's a way to reconstitute your business to actually attract funding. And that can sustain you for the next 10 years or 20 years. When your business has been reconstituted to become more like a startup and then they are going faster. Exactly. We are actually out of time Darlene Timber. We must say a very big thank you to you for all of the useful insights that you have provided. Visa, SMEs, development, funding issues and of course, panaceas for growth and how to leverage technology. Would you appreciate your time? Thank you very much for your time. Thank you for having me. I've been nice to you. I appreciate it. All right. Darlene Timber is the CEO of Aladdin Digital. And that's the size of the show for today. I am Justin Acadone. Many thanks for being there.