Group Head of Large Corporates and Structured Finance at Providus Bank, Dr Biodun Ariyo, has said that Nigeria’s creative sector can secure bank funding if proper structures are put in place.
He spoke last Tuesday during the second panel session of the inaugural QEDNG Creative Powerhouse Summit held at Radisson Blu Hotel, Ikeja, Lagos.
The summit, themed “Financing as Catalyst for a Thriving Creative Economy,” brought together filmmakers, musicians, fashion designers, journalists, bankers, government officials and business leaders to discuss how Nigeria’s creative sector can thrive and not just survive.
The first panel session featured filmmaker Kunle Afolayan, AFRIMA founder Mike Dada, Africa Film Finance Forum founder Mary Ephraim and Duke of Shomolu Productions’ Joseph Edgar, with broadcaster Anike-Ade Funke Treasure as moderator.
The second panel, moderated by former Lagos State Commissioner for Tourism, Arts and Culture Steve Ayorinde, had Dr Shaibu Husseini, Executive Director of the National Film and Video Censors Board (NFVCB); Dr Abiodun Famuyiwa, Head of SME Banking at First Bank of Nigeria; Yemisi Falaye, Head of Legal and Business Development at The Temple Company; and Providus Bank’s Dr Biodun Ariyo as panelists.
Reacting to Joseph Edgar’s suggestion that creatives should not go to banks, Ariyo said, “I would start by saying truly an eyes does not see itself except by reflection. In a way he (Joseph Edgar) might be right. In another way he might not be right. In traditional funding structure for projects, yes it is difficult for banks to understand but there is a model called structure financing whereby you have to understand with the participants.
“But the truth is that if we truly understand the industry, the funding will be made possible. It happens in the metal industry, it happens in the export industry. So there’s no exception to it happening in the creative industry. If we really understand the hand holding person, whereby all of us are carried along from stage to stage, I’m sure funding will be given.”
On the type of capital the sector requires, he added, “I know we’ve been speaking a lot about patient capital, but I think it goes beyond that, not just patience but let’s look at low-cost capital, let’s look at specific capital for a project. For instance, if Davido for instance sings in O2, it’s very likely that the returning of that funds or whatever proceeds he gets sits in O2 or it’s perhaps remitted from that space so the bank’s concern is two ways when we are lending.
“Performance and payment. And then we have one mantra, ‘never lose your capital’. If we don’t want to lose our capital, we will take one thing they call ‘what will make the unwilling willing’. And that is holding you to something. But the truth is we are creating support from our space from the poetry side to the fact that we even open our lounges to the creative industry.
“You can have your small sector meetings in any of our lounge or branches. FOC we are not gonna take a dime and this is opened to the creatives as well as any other industry. When I came in here and I look at the number of participants, I thought within myself that we can as well hold this on our rooftop at free of charge for the entire creative industry.”
Ariyo stressed the importance of data and profiling.
“Part funding that we also have to look at is the bankability of whoever we are funding. We need to create what can easily be seen in terms of data. Like I always call my brother (Kunle Afolayan), I call him brother Kunle whenever I look at him. When I look at what they are doing, and the capacity of funding we can give, it probably might be beyond me just giving you ten million naira, hundred million naira or the intervention fund five billion. And in my mind I look at this in dollars, how much is this? For a market that is projected in 2030 to be hundred billion dollars.
“So we need to really support this space in terms of what we can do. So if you bring it on, we profile it then provide the finance funding. So now we have funded about four but I can tell you it is a sweet and a sour story. The payment has not been done.”
He explained that the “four” refers to four entities already supported by the bank.
“So we are looking at four entities we have provided funding for and it came to about 1.5 billion out of the funding structure out of five billion. That 1.5 was not good as we speak.
“So it’s a true negative representation of what we intend. We are not saying this is the representation of all… The truth is it is a bumpy road for the bank. We need the bank to understand because what the bank will ask for… they probably will ask for some sort of collateral but again we can swing it and provide indemnity.”
On the type of projects funded, he said, “The projects are actually filmmaking. The discussion we had around that is more like a speculative arrangement. It’s just like someone thinking his song will be sweet and he ends up not getting— or what do you call it ‘E no blow’.
“But as far as the bank is concerned, it is your shavings account, your current account that I am deploying to lend money to someone else so what matters right now is we look at it and say, ‘perhaps the interest rate might not be okay,’ and we brought it down, maybe ten points lower from an average like 20 to 30, but again we still have this. So what I’m saying is this we need the understanding about the projection, we cannot use all size fits all to lend in this particular sector.
“So like creating a forum to sensitize banks, the banks will also ventilate information around bankability. I think that handshaking is necessary and overdue.”
He added that Providus Bank’s fund for creatives was not limited to Nollywood.
“For those who know Providus quite well, we can be called the octopus of the banking industry, and there’s a reason for that. We support all the creative arm, as far as funding and support is concerned. Even when the water looks mucky we try as much as possible to dip one toe and try as much as possible to test it if we will sink or not.
“The five billion we are talking about isn’t even a grant, it’s a fund allocated to my bank for this particular creative industry. But the truth is this we are not limited to the filmmakers alone. It’s the person that comes first that I am going to oblige first.
“The truth is this, we are happy to fund. The music industry is a place we have not really touched on, we spoke about sport and I look at the way we always watch boxing in Saudi Arabia and we don’t do anything about it in Nigeria, this is the industry we can touch on.”
Providus Bank partnered the Federal Government in 2024 to launch a N5 billion Creative Fund to provide low-interest, collateral-free financing for creatives. About N1.5 billion has already been disbursed to four filmmakers, though repayment remains a challenge. The fund is part of President Bola Tinubu’s Renewed Hope Agenda and is expected to grow Nigeria’s creative economy, projected to hit $100 billion by 2030.
