5 Major Challenges Facing Entrepreneurs In Nigeria (Problems)

5 Major Challenges

I talked about the need for Entrepreneur In Nigeria, Despite the need for an entrepreneur, there will be challenges and circumstances. A Report commissioned by the World Bank in 2008, to access the challenges confronting businesses in Nigeria, identified a wide array of issues as constraints to entrepreneurship in Nigeria.

These include: poor electricity supply, inadequate access to finance, poor transportation, unfriendly tax regime, poor access to land, high cost of interest rate on money borrowed, high crime rate, corruption, unfriendly political, environment/inconsistency in government policies, obnoxious customs and trade regulations, inadequately trained workforce, and Labour regulations.

The Most critical impediments to entrepreneurship in Nigeria include the following:

#1. Ignorance

The biggest challenge facing entrepreneurs in this country is ignorance. Many people just print business cards and letterhead papers, and start-off their businesses without understanding the basics. Many other entrepreneurs rely only on their technical competence. They know little or nothing about bookkeeping, bank account(s), and strategic financial decision-making.

The biggest challenge facing entrepreneurs in this country is ignorance Click To Tweet

The violation of laws guiding organizational financial management has led to business failure and bankruptcy. Also, being an employer. It is dangerous to start a business on the run with the aim of learning on the go. There is also a high level of ignorance on financial apparatus available for entrepreneurs.

#2. Inconsistency In The Policies of Government

Inconsistency and incessant change in government policies are one of the major challenges being faced by Nigerian entrepreneurs. Policies change depending on the political party, as well as the helmsman, who holds the rein of governance.

Many of the policies made do not even last four (4) years before a new administration changes them. While big companies may have some surety by way of insurance against vagaries of unforeseen extraneous factors, SME investments in agriculture and many other businesses are prone to unseen cankerworms and are without any insurance against unwholesome eventualities.

 

Most Inexperienced Entrepreneurs do not manage their finances properly. Click To Tweet

 

#3. Cash Flow Management

Most Inexperienced Entrepreneurs do not manage their finances properly. They give out too many credits to customers and use fund from the business capital to pay personal bills. This has led to the collapse of many businesses. An entrepreneur should learn how to manage is finances in order not to run out of business.

#4. Difficulty In Securing Loans From Financial Institutions

A major challenge, faced by entrepreneurs in Nigeria, is the issue of initial/start-up capital. This is due to the lack of stability in the political and social economic system. Another reason for this is that most banks see lending to SME entrepreneurs as a huge risk. Others tend to frustrate aspiring entrepreneur with some of their ridiculously huge collateral and unrealistic interest rate requirements. A poll on challenges facing entrepreneurship in the country shows that almost three-quarter of Nigerians (75%) believe that it is not easy to obtain a Loan business In Nigeria. Access to finance is made more complex because most businesses are not formalized; therefore their owners have nothing to present as collaterals to the bank(s)

 

#5. Corruption

The corruption in politics, the Law Enforcement system, including the armed forces and the hudicil system. Taxes And procurement create big impediments to successful entrepreneur in Nigeria. Corruption from individuals emanates from the desire for quick returns. This is inimical to entrepreneur development.

 

Conclusion

 There are many challenges of an entrepreneur, especially in Nigeria. What did you think about the above-mentioned challenges? If you have anything to add or contribute please use the comment box.

 

 

 

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