Govt raises $16.2m venture capital to boost software devt
•Tasks Nigeria’s 17m SMEs on technology acquisition
•Fidelity Bank to raise stake on SME financing
TO further drive the growth of software development in Nigeria, the Federal Government, through the Ministry of Communications Technology has raised a venture capital fund of about $16.2 million (N2.71 billion) to be disburse to any qualified start-ups with innovative ideas within and outside the Information and Communications Technology (ICT) sector.
Besides, the Ministry of Communications Technology disclosed that it has lined up several programmes that will further drive the growth of ICT in the country.
Specifically, the administration identified development of mobile applications and software as key areas that may enjoy attention from investors under the fund.
Speaking in Lagos yesterday, at the early morning SMEs programme on Inspiration FM, sponsored by Fidelity Bank Plc, the Minister of Communications Technology, Dr. Omobola Johnson said the ministry has discovered that software development is a big market for Nigeria, “but yet to be fully explored. So, we are doing everything possible through initiatives including Ideas Lab; Techlaunch Pad among others to develop that sub-Sector.”
Johnson noted that the initiatives are also part of the plans to drive local content, stressing that more local firms must be encouraged to participate in the development of Nigerian economy.
According to her, when the Ministry of Communications Technology was created in 2001, “we discovered that only small proportion of indigenous firms were playing in such a big market as the country’s ICT sector, so we decided that we must create huge opportunities for investors. So we spotted software development and since then we have been driving traffic towards that area.
“IdeaLab is a platform to develop software. It is an incubator and accelerator platform that supports young Nigerians developing applications. Any viable startups can apply. The plan is to take the idea from the concept (crude) to realization and exposure for viability.
“Government recently launched the Venture Capital initiative, which has been seeded and we were able to raise about $16. 2 million and we are ready to make our first investment and these companies (startups) can participate. They can obtain venture fund here, but it is not only companies from the IdeasLab, any viable startup can actually apply and if they meet the requirement, they will get funding.”
Speaking on how ICT can enable growth, the minister enjoined the about 17 million SMEs to leverage technology for their growth, stressing that it holds huge development advantage for them.
“Optimizing the Internet provides entrepreneurs the opportunity to access a lot of people that most businesses would not have had access to. We are trying to increase the capacity of businesses in the country. We are optimistic that the venture capital funds established would help to improve access of innovative businesses to finance, as many of them have no credit history and this helps us to improve the ecosystem. The beauty of the ICT sector is that it encourages diverse investments from different sources”, she added.
According to her, IT enabled SMEs to have access to the market, even on the Internet. She stressed that if SMEs could be exposed to the Internet, they have huge market opportunities to showcase their products and services.
The minister also said that technology also increase SMEs productivity, stressing that people are looking for businesses that are very active and profitable.
Managing Director of the Fidelity Bank Plc, Nnamdi Okonkwo, explained that the SME programme is an initiative of the bank to support and sustain the growth of small businesses.
“Our recent listing among the SME friendly banks by the Bank of Industry (BoI) is simply a recognition of what we have been doing in the SME space. It is not an accident but a thought-out strategy. If nobody supports SMEs, how do we have the Dangotes of tomorrow? A lot of people are financially excluded and they need to be brought into the financial system.
“We have a well thought-out product to cater for needs of various SME clusters and that is why we need a forum where the Minister of Communications Technology would let people know what is possible.
“As an SME, it is not just the about the physical space but considerations should be given to the virtual space in order to drive the growth of a digital economy. Today is just one of the ways where Fidelity Bank Plc is showing how it is involved in the SME sector.
“We are not just increasing access to finance as it is not just about the money but how businesses stay alive. A lot of things need to be done in the area of implementing SME strategy and that is why we have the SME Managed Funds to cater for the needs of SMEs. In our office, we have dedicated desks that address such concerns. We hope we will begin to see the impact in the years to come”, he added.