The National Bureau of Statistics has said that 86.1 per cent of youths lack access to finance their businesses.
The bureau in collaboration with the Federal Ministry of Youth and Sports Development disclosed this in its ‘National Youth Survey, 2020’ report.
It added that 4.9 per cent said inconsistency in government policies was a major problem for their business; 4.6 per cent disclosed that obsolete equipments did not allow them to thrive, while three per cent said lack of proper training hampered their business growth.
The report said, “At zonal level, most youths from all the zones reported the challenge of financing their businesses; youths South-West (100 per cent) top the list followed by North-East (93.6 per cent) while youths from South-East (78.1 per cent) were least.
“However, youths from North-Central (9.2 per cent) faced the challenge of obsolete equipment for their businesses followed by youths from South-East (3.5 per cent) while youths from South-East (10 per cent) reported inconsistency in government policies as a major challenge that is affecting their businesses.”
According to the NBS, high rate of interest, stringent bank policies, government policies, and other measures adopted by the banking industry are holding back youth-run businesses.
The report said, “The result from the survey shows that nationally, youths (31.7 per cent) could not access bank loan due to high rate of interest followed by stringent bank policies (24.8 per cent) and government policies (7.3 per cent) while (13.2 per cent) of the youths attributed it to other measures.
“At zonal level, youths from South-South and South-West (45.7 per cent and 35.5 per cent respectively) could not access bank loans due to high rate of interest while youths from North-West and North-Central (54.5 per cent and 33.8 per cent respectively) could not access bank loans due to stringent policies. Youths from South-South and North-East (15.7 per cent and 13.3 per cent respectively) could not access bank loans due to government policies.”
According to the NBS, 75 per cent of youth businesses that made turnover in 2020 were startups, most of which were in the South-South.
The organisation said, “At zonal level, youths in South-South yielded highest turnover followed by North-Central (39 per cent) of youth’s turnover and North-West (25.7 per cent) while North-East (12.7 per cent) had the least turnover in the enterprises.
“Conversely, South-East and South-West zones recorded losses 35.9 per cent and 20.3 per cent respectively in the business enterprises that were set up by the youths.”
According to the report, personal savings, loans, family sources, cooperate/esusu, and grants are the major sources of finance deployed by the youths to run their businesses.
The NBS said, “Nationally, 34.5 per cent of youths sourced fund through government grants to set up their business enterprises; 29.7 per cent of youths used their personal savings while 15.1 per cent sourced funds through cooperative thrift and 2.4 per cent of the youths obtained loans to start up their business enterprises.”
The statistics body revealed that 90.8 per cent of youth-run enterprises were sole proprietorship; 1.5 per cent were partnerships, 0.3 per cent were private liabilities; and 7.4 per cent were into other businesses.
It said only 8.9 per cent of youths had registered business enterprises. It added that more females, 65.4 per cent, operated business enterprises.