Nine years ago, in 2005, Saviour Ichie was a hawker scouring the streets of Lagos in a solo effort to market his beauty products. The Managing Director of Bright Future Enterprises had a bright business idea to manufacture the popular Authentic Herbal Cream. But he lacked the start up capital.
After Lagos commercial banks and micro finance banks failed to grant him loan, he travelled to Onitsha, Anambra State to borrow N20,000 from a friend. He signed an undertaking to pay back in six months.
Ichie bought little active ingredients, bottles and labels and started producing Authentic Herbal Cream from his kitchen.
As customers bought and got value for their money, he saved up more money to equip the business.
Motivation
Ichie initially manufactured the product for fun and gave it out to friends until God spoke to him in a vision.
“Friends would tell me the product was good and effective. It was the report of one who used it that partly motivated me. He told me that the product was so good and asked why would I not consider doing it on a commercial scale,” he recalled.
“But there was a certain day, after producing a little quantity inside my kitchen, I wanted to go and take my bath when I heard a voice that called me and said I should not go for the shop I wanted to rent at Ijesha, that I should give what I was doing a chance.
“I went to one of my elders in my church, Endurance Onwukwe, and shared my vision with him. He told me that it was God that spoke to me and that I should try and do what God asked me to do. That was how I started the business.”
Today, his range of beauty products, including Authentic Herbal Cream, Authentic Soap, Authentic Hair Boaster and Authentic Balm, are available in all the 36 states and Abuja.
They are also marketed in other parts of Africa. Yet “This is just stage two of my business plans,” he said.
Police harassment leads to NAFDAC registration
Incessant harassment by the police while hawking his products made him to register them with the National Agency for Foods, Drugs Administration and Control (NAFDAC).
“Police were using NAFDAC registration to harass and extort money from me. Each time they arrested me, even with empty cans, they would ask me to bring N10,000 to N50,000 bribe.”
He wrote to the then NAFDAC Director General, the late Dora Akunyili, who replied and advised that micro entrepreneurs like him should come together under an umbrella body and utilise a common facility.
This led to the formation of the Association of Micro Entrepreneurs of Nigeria (AMEN), which now has over 3,000 registered members. Ichie is the National Coordinator.
He said some of his products have been registered by NAFDAC, others are in the process of being registered.
NAFDAC, police harassment continues
However, AMEN members are relocating to Cotonou in Benin Republic to escape the high cost of doing business in Nigeria and police harassment.
Ichie narrated that AMEN members buy empty bottles and active ingredients in the market and while going home or to the factory, the police arrest them and allege that they are manufacturing without NAFDAC approval.
“Even when the value of the materials is not up to N5,000 the police would ask for N50,000 bribe to release you.
“One of our prospective members called me this morning (Thursday, September 25) and said police came to his factory and arrested him and he paid N100,000 to bail himself out. He said the same thing happened to a colleague of his in the same area of Lagos about a month earlier.
“That one paid N100,000 to police for bailout. Most times the allegation is about being in possession of empty plastic bottles and that they are manufacturing without NAFDAC registration because they know that it is not easy to get.
“If you resist they threaten to hand you over to NAFDAC. The fear of NAFDAC is the beginning of wisdom for micro entrepreneurs. So our members are now relocating to neighbouring Cotonou to escape from these harassments.
“You see how police are helping to kill local industries, throwing people into the labour market. Many of these industries have between 10 and 30 workers.
“Last week a man hawking my products and other products in Ebonyi State was arrested by NAFDAC officials. The charge against him was that he had no mobile permit to hawk. He was fined N50,000.”
Banks as killers of creative ideas
Ichie’s encounter with both commercial banks and micro finance banks (MFBs) showed that they have nothing to offer entrepreneurs, and rather hasten the death of business ideas.
“Banks enslave small business owners. If MFBs lend you money today, as with commercial banks, it starts running immediately. They will not even give you the chance to start production. Before the money gets to you, some hidden charges which they will not disclose to you have started running.
“When you secure the credit facility you discover that you have entered into a valley, and that it is only by the grace of God you can come out of it. On one occasion I got N2.5 million credit from one bank, they removed N450,000 from the start as hidden charges.
“There are times they make deductions from your account without sending you an alert. Those come up with a multitude of names of different hidden charges. I needed N2.5 million, and they removed N450,000 and I would still pay very high interest of 25 per cent to 30 per cent.
“However, I liquidated the loan in six months and applied for N5 million. It was the N5 million loan that almost drove me out of business. I paid it by the grace of God, and after paying it the bank asked me to borrow again, but I refused.
“I had to borrow money from my family member to liquidate that bank credit in order to get out of the hook.
“Today, the same banks that made things difficult for me are coming to beg me to patronise them. They keep coming, begging, because they have seen the evidence of my creative idea. Didn’t I approach these banks for start up capital? I gave them a blueprint of my creative idea but they shunned me.
“It is not advisable to go to banks for money when you are starting up because the terms and conditions of giving you credit are outrageous and may likely quicken the collapse of your business initiative.
“Instead, dispose of some of your valuable assets to fund your business. You can always buy and replace those assets you sold to raise funds.”
Mozambique offers manufacturing incentive
Ichie, now a multi millionaire, had an offer from the Mozambican government two months ago to establish his business in that country. He was sent a letter with promise of credit facility, tax free conditions, and 24-hour electricity supply. The only condition is that he must employ Mozambicans.
The government got to know his products through a friend who sells them in the country.
“Mozambique wants to industrialise. The government wants to have most products marketed and used in the country produced there. They contacted me through the address on my products.”
