Stakeholders in the information and Communications Technology (ICT) industry have faulted recent drives by banks to set up technology and innovation hubs around the country, which is motivated by the infusion of funds by the Central Bank of Nigeria (CBN).
It will be recalled that the CBN recently made a provision for N22.9 billion Creative Industry Financing Initiative (CIFI) loan to help finance software development students, tech start-ups and players in the entertainment industry.
However, the banks, in compliance with the CBN directive have gone on a drive to select qualified beneficiaries to the loan. Also, some commercial banks have indicated their plans to set up ICT Hubs for the growth of the industry and incubation of innovators’ ideas. But in a twist, ICT industry players believe that the loan will be more productive if used to finance already existing hubs, which they say are being stifled for lack of adequate funding.
In a swift reaction, the Chief Executive Officer of Infographics Limited, and Partner iX Consults, Chinenye Mba-Uzoukwu noted that there are already over 360 ICT Hubs in the country that need funds to upscale. “Banks should help existing Hubs to scale up, rather than start setting up their own Hubs.” He further wondered why banks would starve existing businesses of loans but would rather compete in the same business.
Echoing the same view, the Chief Executive Officer of Signal Alliance Limited, Adanma Onuegbu said that banks should realize that the government cannot run Hubs the operators of the Hubs depend on financial institution loans, among others, to remain afloat.
According to her, sourcing loan from banks has been very difficult as the conditions are very difficult to meet, especially when the business is a budding business. “The conditions are stringent. Let’s get it right for ones,” she implored.
She asked banks to discard the idea of floating and running ICT Hubs, rather, they should look at the many Hubs around the country and support them with funds so they can be globally competitive and churn out innovators that are highly motivated.
Some of the conditions given to some of the beneficiaries of the CIFI loan are that they should have between 20 percent and 30 percent equity contribution. And that the loan is not meant for established Start-Ups.
ICT stakeholders believe that existing incubation and innovation Hubs around the country will perform better and accommodate more innovators if the banks will invest in them, through a partnership or affording them long-term loans.
The Central Bank of Nigeria (CBN), in collaboration with the Bankers’ Committee, introduced the CIFI to improve access to long-term low-cost financing for entrepreneurs and investors in the Nigerian creative and information Technology subsectors, as part of the efforts to boost job creation in Nigeria, particularly among the youth class.