Franchise industry in Nigeria currently dominates several sectors

LAGOS, Nigeria - Oct. 28, 2015 - PRLog -- The franchise industry in Nigeria currently dominates key industries such as oil and gas, fast food and beverages, retailing and hospitality. According to experts one sure way of growing the size of formal SMEs is through franchising. It is estimated that there are 17 million SMEs in Nigeria, however only a little over two million have some form of formalization, and are more suited to be called SMEs.

With population of over 170 million, and fast growing middle class, Nigeria is becoming an increasingly attractive market for global brands. It is expected that with the diversification of Nigeria economy and the entrance of global brands, the franchise opportunities would grow at a faster rate.

Dr George Ogbonnaya, Group Head: SME Banking, First City Monument Bank, will speak at the SME and Franchising Nigeria Exhibition and Congress, organised by Informa Life Sciences Exhibitions. The event will take place for the first time on December 2-3 2015 at the Eko International Convention & Exhibition Centre, Lagos, Nigeria.

“There are two major types of funding options for franchising, namely Equity and Debt. In most cases a mixture of the two is applied. As the franchise opportunities expand, we forecast increasing contribution from the debt option simply because the franchising model helps mitigate majority of the risks associated with startups,” highlights Dr Ogbonnaya.

SME and Franchising Nigeria is supported by governmental bodies SMEDAN, NOTAP, NIFA and NASME. It provides a unique platform for Nigeria's entire SME and franchising value chain to meet under one roof.

“The issues of market and product risks are very much mitigated with a successful franchise model. The management capacity and operational risk are also minimized. The resultant effect will be a progressively higher ratio of debt to equity in the funding franchise opportunities,” concludes Dr Ogbonnaya.

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