Nigerian Youths Shun Bank Loans,Seek Alternative Sources
A recent report by National Bureau of Statistics says Nigerian youths are retreating from bank loans on account of high interest rates.
About 31.7 percent of youths in Nigeria lack access to bank loans to finance their businesses,the bureau said in its National Youth Survey for 2020.
Besides, stringent bank policies, government policies and other measures adopted by banking institutions make it difficult for youths to finance their businesses through bank loans.
The survey said that youths across the six geo-political zones source for funds to set up their businesses enterprises through personal savings, loans, family sources, cooperative/Esusu, grants and other sources.
It added that nationally, 34.5 percent of youths sourced fund through government grants to set up their business enterprises, while 29.7 percent of youths used their personal savings.
According to the report,15.1 percent sourced funds through cooperative thrift and 2.4 per cent of the youth obtained loan to start up their business enterprises.
It said:“The results on zonal level shows that 96.6 percent of youths from South-South obtained grants to start-up businesses and 49.2 percent of youths from North-Central also obtained grants to start-up their businesses.
“Meanwhile, in the South-West, 26.2 percent of youths acquired fund through cooperative thrift to start-up their businesses, while in the North-West 44.4 percent and South-West 24.8 percent of youths obtained funds through other sources.”
The report said that the survey indicated different types of challenges faced by youths in their business enterprises.
According to it, nationally, 86.1 percent of youths faced the challenge of access to fund to finance their businesses, while 4.9 per cent faced the challenge of inconsistency in government policies.
It said that another 4.6 per cent faced the challenges of obsolete equipment while three per cent faced the challenges of lack of proper training in relation to their businesses.
“At zonal level, most youths from all the zones reported the challenge of financing their businesses; youths from South-West (100 percent) top the list followed by North-East at 93.6 percent, while youths from South-East (78.1 per cent) were least.
“However, youths from North-Central (9.2 percent) faced the challenge of obsolete equipment for their businesses followed by youth from South-East (3.5 percent).Meanwhile, youths from South- East (10 percent) reported inconsistencies in government policies as a major challenge affecting their businesses.”
It added that across the six geo-political zones, more female youths (65.4 per cent) operated business enterprises than their male counterpart.
It said that the North-West with 82.9 percent had the highest number of female youths who operated business enterprises followed by South-South (73.5 percent), North Central (70.7 percent), while the North-East had 36 percent.
Besides,64 percent male youths in North East engaged in business, more than females followed by South-East (57.7 per cent) while the North West had just 17.1 percent male youths in business enterprises.
For business registration, the result indicated that only 8.9 percent of youths registered business enterprises across the six geo-political zones.
