Major problems of Nigerian entrepreneurs As the need and call for entrepreneurship increases day by day, the development of entrepreneurship has been stalled in the last few years. This is because of the problems affecting and limiting its development. Many Nigerian entrepreneurs face a lot of challenges. Here are the major ones that have been affecting the development of entrepreneurship in Nigeria
Lack of capital:
There are thousands of Nigerians with wonderful ideas that could be turned into a real business. However, most of them lack the capital to push their ideas into reality. The lack of capital is the number one reason why the development of entrepreneurship has not improved over the years.
Difficulty in securing loans from financial institutions:
In the first point, we established that the first problem most Nigerian entrepreneurs face is the lack of capital. Most people then try to turn to banks and other financial institution to secure loans to fund their idea or business. But getting a loan is very difficult and most times impossible for average Nigerians who are looking for funds to start up a business or who already have a small business.
The reason for this is that the banks and financial institution feel it is a huge risk lending money to them. Financial institutions are not sure if entrepreneurs will be able to pay back the loan. Another major reason why securing a loan is so difficult is the requirements needed for securing this loans. Most of the financial institutions demand huge collateral and high-interest rate that small business owners or start-ups cannot afford. This discourages most Nigerian entrepreneurs and kills many promising ideas.
Poor state of infrastructure in Nigeria:
The lack of good infrastructural facilities is another major problem affecting the development of entrepreneurship in Nigeria. The number one issue of infrastructure affecting entrepreneurship is the unstable power supply that has forced a lot of businesses to close down. Most entrepreneurs have to rely on generators to run their businesses. They have to spend a lot of money on fuel to run their generators. Also, lack of good roads and transport system in another infrastructural challenge plaguing entrepreneurship in Nigeria. The poor state of infrastructure in Nigeria makes the cost of running a business or company high. Most small businesses and start-ups can’t afford it
Unstable state of Nigerian economy:
The state of the Nigerian economy is also a major challenge for entrepreneurs in Nigeria. The state of a country and its economy plays a significant impact on the level of entrepreneurship in any country. The socio-economic problems and the unstable economy of Nigeria has killed a lot of businesses in the last couple years. All these mixed with political instability is not helping businesses at all.
Inconsistent government policies:
There is no continuity in Nigerian government especially when there is a change in governance. Unfortunately, there are no good policies that could create necessary conditions for the development of entrepreneurship in the country. The government needs to create policies and an environment that will give more freedom and possibilities for entrepreneurs.
Poor knowledge on how to run a business:
Not all the problems are from the government or capital related. Another problem is that most people don’t know how to manage and grow a business properly. They don’t seem to learn or have the resources to learn how to manage and grow a business.
Inadequate planning and poor execution:
This is the result of the poor knowledge on how to run a business. Most people don’t plan properly before they start their business. They don’t make researchers about the business, the market for the business, the cost of production, etc. Many do not even make a business plan. So, after they start a business, they get stuck and the business fails. Also, a lot of people start off the wrong path and eventually the business ends up failing.
Lack of patience and greediness:
A lot of new business owners and young entrepreneurs are looking to make money quickly. They are more money oriented and not entrepreneurship oriented. In fact, a lot of people go into business because of the money and they want it fast. Many people want quick money but as a result, they don’t have enough patience to grow a business that has the potential of becoming big. Also, due to the desire for quick returns and greediness, a lot of people try to find easier means of making more money in business and ends up getting duped
High risk involved in starting a new business
Many are afraid of the risks and give up the idea to start own business. However, it is important to understand that a business and risk go hand in hand. no pain, no gain.
Lack of entrepreneurial mindset:
This is the result of the mentality that was brought instilled in us in the last decades. This is how the colonial era influenced the mindset of many Nigerians. As we have already mentioned, most people were taught to be in the labour force and not to be entrepreneurs. What are the prospects of entrepreneurship in Nigeria? You have read about the problems of entrepreneurship in Nigeria.