Godwin Ehigiamusoe is the MD and Founder of LAPO(Life Above Poverty Organization ) Microfinance Bank. His career journey is one that speaks of tenacity, continuous development, empathy for humanity, and spotting and solving social problems. A shrewd social entrepreneur, he shares his experience of building a social enterprise and gives very useful advice to upcoming social entrepreneurs.
After my university education, I began my career in financing micro and small businesses as a cooperative officer. In April 1985, I joined the Cooperative Department of the then Bendel State Ministry of Commerce and Industry. The following year, I went for a very rewarding post-graduate one-year programme at the Federal Cooperative College, Eleyele, Ibadan. The programme provided me with the understanding of the philosophy and practice of the cooperative movement. In 1987, I was posted to Delta State, where I was involved in the promotion and supervision of agricultural, thrift and multipurpose cooperative societies and unions. It was while I was working as a rural cooperative officer that I initiated LAPO as a non-profit community development project. While setting up LAPO, I conceptualized poverty as an octopus with the tentacles of material deprivation, poor health and social exclusion. The organization was therefore designed to address material deprivation with microfinance; poor health with health awareness; and social exclusion with social empowerment programmes. The LAPO Project began with three members, and was incorporated as a company limited by guarantee. In 2010, LAPO set up a regulated microfinance bank, and in 2012, it got the approval of the Central Bank of Nigeria to operate as a national microfinance bank. LAPO non-profit is still involved in the provision of health and social empowerment services.
Setting up an organization can be challenging, and doing so as a social enterprise requires the delicate balance of making impact with profit in a manner that ensures sustainability, as it is only a viable enterprise that can make impact.
At the early stages of development of LAPO, my task entailed the clear conceptualization of poverty and designing institutional response strategies. For example, I formulated what were to become the operating assumptions which defined the focus, services to be offered, target of our services and delivery approach. These assumptions influenced our decision to focus on lending to low-income people; prioritizing women and children as prime targets of our services; incorporating social services into our product mix; and adopting a group approach. There were a lot of policies and procedures to be developed; and funding was also a critical component of my job description. Various phases of growth of the organization presented their respective challenges. At the beginning, LAPO Microfinance Institution’s approach and terms appeared to be too good to be true for many people, particularly our outright refusal to demand for collaterals for loans. I remember we had to do a lot of motivation and sensitization. As we gained acceptance, the challenge of inadequate funds to meet increasing credit demand arose. While grants, which were our major source could be adequate to implement pilot projects, they were obviously inadequate to execute growth plans. We had to look for loans from financial institutions – mainly international financial institutions. This was quite challenging, as their terms were also tough. Today, we have a long list of lending partners.
I had a clear vision of creating a sustainable institution where low-income earners could access a range of financial services on sustainable basis. LAPO Microfinance Bank with over 1.2 million clients, with superior operational and financial performances is what I consider a major achievement, obviously made possible with the support of a dedicated team of young Nigerians as staff.
I have also played, (and I think I am still playing) an active role in developing the microfinance sector in Nigeria and indeed in Africa. I have just concluded a major comparative study of the Ethiopian and Nigerian microfinance policy, regulatory and supervisory guidelines. I hope recommendations will be helpful to the development of microfinance in Africa.We have just won the 2017 Best Microfinance Bank Award at the Business Day Annual Banking Awards. This is the 4th time in a row from 2014 to 2017
Lessons to learn
Nigeria is a land of opportunities, even our myriads of problems or challenges if you like, could be converted to opportunities. This is perhaps the only country where you can close your eyes, and you can still behold opportunities. One is encouraged by the current burst of entrepreneurial spirit, and the people should sustain this. No matter how passionate you are about a sector and an enterprise, please pay attention to the numbers or financial viability. Enterprises with weak financial performance can hardly scale up successfully. Real business success in any clime depends on hard-work, honesty and prudence.