I never implied so, but with the way it is one way or the other will will embrace it soon.

emmanuelewumi:



Na wa ooo, save our reserves in crypto currency. That is quite speculative and dangerous

Who is the issuer of the crypto currency?


China that has a Sovereign crypto currency that is issued by their central bank, did not save her reserves in crypto currencies

Dead capital in real estate, what does that mean?

emmanuelewumi:



I think PENCOM should allow workers to borrow against the retirement savings for home ownership.

We have a lot of dead capital in real estate, government needs to look at how to resurrect the dead capital in real estate to catalyse the economy


According to PWC, we have between $300 billion to $900 billion dead capital in the Nigerian real estate market

ojesymsym:
Dead capital in real estate, what does that mean?

Up to 90% of properties in Nigeria are not titled, as a result of which they are not acceptable to financial institutions as collateral.

If you can't borrow against your assets, it will take a long time to multiply wealth.

A property worth N100 million that doesn't not have a certificate of occupancy will not be accepted by a bank for a loan of N70 million, with your 500,000 units of Dangote Cement shares you can easily get a loan of N70 million

emmanuelewumi:



I think PENCOM should allow workers to borrow against the retirement savings for home ownership.

We have a lot of dead capital in real estate, government needs to look at how to resurrect the dead capital in real estate to catalyse the economy


According to PWC, we have between $300 billion to $900 billion dead capital in the Nigerian real estate market

this can reduce the poverty trajectory in Nigeria we moved from 100m to 106m ...if this dead capital is unlocked we will reverse the poverty pandemic ravaging Nigerians .....

emmanuelewumi:



Up to 90% of properties in Nigeria are not titled, as a result of which they are not acceptable to financial institutions as collateral.

If you can't borrow against your assets, it will take a long time to multiply wealth.

A property worth N100 million that doesn't not have a certificate of occupancy will not be accepted by a bank for a loan of N70 million, with your 500,000 units of Dangote Cement shares you can easily get a loan of N70 million

am not a fan of borrowing against fixed asset it always end in premium tears.....it very difficult to mint new money at above 20 percent per anum that what is obtainable in the Nigerian economy ....banks want 27 percent interest.....the ...

ahiboilandgas:
am not a fan of borrowing against fixed asset it always end in premium tears.....it very difficult to mint new money at above 20 percent per anum that what is obtainable in the Nigerian economy ....banks want 27 percent interest.....the ...

You borrow what the cash flow from the investment can easily pay off in 5 years.

A property of N50 million should be able to get a rental income of N12.5 million in 5 years, borrowing N10 million against the property is quite conservative and risk free

ahiboilandgas:
this can reduce the poverty trajectory in Nigeria we moved from 100m to 106m ...if this dead capital is unlocked we will reverse the poverty pandemic ravaging Nigerians .....

Exactly, imagine having dead capital of N100 million in real estate, but you don't have the resources to harness an investment opportunity of just N10 million

emmanuelewumi:



You borrow what the cash flow from the investment can easily pay off in 5 years.

Nigeria is too unpredictable.....example a lot business men took up loans to build depots to tap into the 2 trillion naira oil and gas business ...after the govt tricked dapman and ipman member to establish plenty depots and station we now have self sufficiency in storages,haulage And retail point ....suddenly mr pmb won election accuse ever body of corruption and stop ppra from giving any body import allocation.on pls ..only NNPC this a 50m litres a day business....over 50 depot are idle...since 2015 ...some survive on triput agreement with ppmc ......so what happens to the asset stake to raise the finance to build a depot....what happen to the workers? ...capital oil and Gas has 24 loading arm can fill 300 truck daily .......out of action since 2015 ....

ahiboilandgas:
Nigeria is too unpredictable.....example a lot business men took up loans to build depots to tap into the 2 trillion naira oil and gas business ...after the govt tricked dapman and ipman member to establish plenty depots and station we now have self sufficiency in storages,haulage And retail point ....suddenly mr pmb won election accuse ever body of corruption and stop ppra from giving any body import allocation.on pls ..only NNPC this a 50m litres a day business....over 50 depot are idle...since 2015 ...some survive on triput agreement with ppmc ......so what happens to the asset stake to raise the finance to build a depot....what happen to the workers? ...capital oil and Gas has 24 loading arm can fill 300 truck daily .......out of action since 2015 ....

Leveraging 20% to 40% of the value of your income generating assets , for a venture which the cash flow and not capital appreciation from the asset or Investment can liquidate in 5 years won't kill you.

Most of those businessmen with gory tales took high risk, they were highly geared, some with the connivance of the banks borrowed 300% or more of the value of the asset pledged

ahiboilandgas:
Nigeria is too unpredictable.....example a lot business men took up loans to build depots to tap into the 2 trillion naira oil and gas business ...after the govt tricked dapman and ipman member to establish plenty depots and station we now have self sufficiency in storages,haulage And retail point ....suddenly mr pmb won election accuse ever body of corruption and stop ppra from giving any body import allocation.on pls ..only NNPC this a 50m litres a day business....over 50 depot are idle...since 2015 ...some survive on triput agreement with ppmc ......so what happens to the asset stake to raise the finance to build a depot....what happen to the workers? ...capital oil and Gas has 24 loading arm can fill 300 truck daily .......out of action since 2015 ....

What assets did Capital Oil and Gas use to get loans to build the depots?. Iam sure none or over inflated assets were used and the banking officials were bribed and given kickbacks.

emmanuelewumi:



You borrow what the cash flow from the investment can easily pay off in 5 years.

A property of N50 million should be able to get a rental income of N12.5 million in 5 years, borrowing N10 million against the property is quite conservative and risk free

It actually depends on the location of the house. No bank will give me a loan backed by a 50m house I built in my village.

Also, there is absolutely no guarantee that a 50m house will generate 12.5m rental income in 5 years. You use this house as collateral to take a 10m loan for a business that fails (plus bad luck of bad tenants or failure to find better tenants for the house), the bank will just take your house. And you become homeless.

My point is it is not as easy as you make it seem. It takes a lot of guts to pledge your property as collateral if you are not a multi millionaire with several houses in choice locations.

NL1960:


What assets did Capital Oil and Gas use to get loans to build the depots?. Iam sure none or over inflated assets were used and the banking officials were bribed and given kickbacks.

not all investment loans are covered by asset .it's limit space for bank participation in several business and reduce profitability of banks ....some investment are beyond asset collateral...but cash flow analyis ...whic asset did dangote drop to raise 12 bn dollars for the refinery projects ...?

emmanuelewumi:



Leveraging 20% to 40% of the value of your income generating assets , for a venture which the cash flow and not capital appreciation from the asset or Investment can liquidate in 5 years won't kill you.

Most of those businessmen with gory tales took high risk, they were highly geared, some with the connivance of the banks borrowed 300% or more of the value of the asset pledged

not all investments loan are covered by asset ...some investment loan use other methods like cash flow analysis to reach loan agreements what asset did dangote drop to raise 160bn(1 bn dollars ) for obanjana cements ?successfully paid back for time ...how about the 12 bn dollars refinery? How about small traders in mile 12 that get loans from micro finance banks...

Lazyyouth4u:


It actually depends on the location of the house. No bank will give me a loan backed by a 50m house I built in my village.

Also, there is absolutely no guarantee that a 50m house will generate 12.5m rental income in 5 years. You use this house as collateral to take a 10m loan for a business that fails (plus bad luck of bad tenants or failure to find better tenants for the house), the bank will just take your house. And you become homeless.

My point is it is not as easy as you make it seem. It takes a lot of guts to pledge your property as collateral if you are not a multi millionaire with several houses in choice locations.

I do my real estate valuation multiplying the rental income by 15 to 20.

Definitely a property in the village will give you a zero rental income, so I will value at zero

Dangote used his huge corporate balance sheet to borrow for the refinery. There is a ‘negative pledge’ covenant in the agreement with the lenders. He has to get permission from the lenders to borrow more money in the future using the corporate balance sheet.

ahiboilandgas:
not all investments loan are covered by asset ...some investment loan use other methods like cash flow analysis to reach loan agreements what asset did dangote drop to raise 160bn(1 bn dollars ) for obanjana cements ?successfully paid back for time ...how about the 12 bn dollars refinery? How about small traders in mile 12 that get loans from micro finance banks...

That is project financing, na advance level. Available to the very rich, who are liquid, have track records in the art and science of making money, managing money and multiplying money.


If you have a project of N10 billion that has a high probability of being viable, your bank will appraise the project and provide financing provided you have a track record and can invest about N1 billion to N2 billion your personal money in the project.

Title to the assets of the project will be domiciled with the financiers or banks

Make sense

emmanuelewumi:



I do my real estate valuation multiplying the rental income by 15 to 20.

Definitely a property in the village will give you a zero rental income, so I will value at zero

emmanuelewumi:



That is project financing, na advance level. Available to the very rich, who are liquid, have track records in the art and science of making money, managing money and multiplying money.


If you have a project of N10 billion that has a high probability of being viable, your bank will appraise the project and provide financing provided you have a track record and can invest about N1 billion to N2 billion your personal money in the project.

Title to the assets of the project will be domiciled with the financiers or banks

ppra import allocations for pms during mr Jonathan was very liquid investment with forex guarantees by the Nigeria state with profits predetermined imagine allocated 50m litres of pms by ppra to your firm and the Nigeria state has guaranteed a subisdy payments of 50 naira per litre .....no Nigerian bank will not roll with you after all na tb then know

emmanuelewumi:



That is project financing, na advance level. Available to the very rich, who are liquid, have track records in the art and science of making money, managing money and multiplying money.


If you have a project of N10 billion that has a high probability of being viable, your bank will appraise the project and provide financing provided you have a track record and can invest about N1 billion to N2 billion your personal money in the project.

Title to the assets of the project will be domiciled with the financiers or banks

This is where the majority of the loans that went bad come from.


Non performing loans stood at N1.2 Trillion in September 2020

emmanuelewumi:



That is project financing, na advance level. Available to the very rich, who are liquid, have track records in the art and science of making money, managing money and multiplying money.


If you have a project of N10 billion that has a high probability of being viable, your bank will appraise the project and provide financing provided you have a track record and can invest about N1 billion to N2 billion your personal money in the project.

Title to the assets of the project will be domiciled with the financiers or banks

Great point. But you don’t have to be very rich to get PF funding from the banks

If you have the required contracts (offtake, supply, EPC, O&M, etc) from strong parties, you can raise equity from PE and other third party equity investors and the banks

Under 40 marketer used other people money to have big turn over in their oceanic bank coperate accounts with a 14 by 14 office location inside container to trigger bank to buy product in million s for them to sell ....end up in premium tears and Amcon.....ramanniya depot move from a palm oil dealer to a depot owner with zero asset no aduited report no balance sheet no long grammar( Alh can even hear long accounting grammar ) just hunderd of millions paid via this by marketers located in far north...boom ocenic bank built the depot and still operational and doing NNpc triput ......book ,grammar doest work in Nigeria

Lazyyouth4u:


Great point. But you don’t have to be very rich to get PF funding from the banks

If you have the required contracts (offtake, supply, EPC, O&M, etc) from strong parties, you can raise equity from PE and other third party equity investors and the banks

Available to the rich. You can be rich in terms of money, track records, network, business ideas etc.

Banks won't provide a N100 million finance to someone who has not handled his own N10 million.


Read about the case of the guy on Twitter who lost N150 million he got from people in a forex scam, marketed by a guy he met at N power training.

How can a normal person entrust a total of N150 million to a guy who went to N power training due to joblessness to be paid 40 k per month after the training

emmanuelewumi:


Available to the rich. You can be rich in terms of money, track records, network, business ideas etc.

Banks won't provide a N100 million finance to someone who has not handled his own N10 million.


Read about the case of the guy on Twitter who lost N150 million he got from people in a forex scam, marketed by a guy he met at N power training.

How can a normal person entrust a total of N150 million to a guy who went to N power training due to joblessness to be paid 40 k per month after the training

The bolded is not project finance o

Professor Nnaji of Geometric and Philip Iheanacho of Azura were not billionaires but secured equity and debt financing with well structured projects. Connections, yes. Wealthy, not necessarily.

By the way, such funds are not paid to the sponsors’ accounts. They are paid into the project accounts. Adequate checks and balance mechanisms are in place by the lenders to ensure the sponsors don’t japa with the money.

The project may fail for other reasons linked to market or operations. But not chopping of the funds by the project sponsors.

ahiboilandgas:
not all investment loans are covered by asset .it's limit space for bank participation in several business and reduce profitability of banks ....some investment are beyond asset collateral...but cash flow analyis ...w[b]hic asset did dangote drop to raise 12 bn dollars for the refinery projects [/b]...?

Dangote is building a refinery which is to fill an area of need. Giving a huge loan based on the building of fuel depots for the sole purpose of fuel importation and storage is super risky because there is no guarantee that a government will not come in to fix the refineries. Well, Buhari came in and made only NNPC to import and also gave a license to Dangote to build a refinery. BUA is also building.

emmanuelewumi:


Available to the rich. You can be rich in terms of money, track records, network, business ideas etc.

Banks won't provide a N100 million finance to someone who has not handled his own N10 million.


Read about the case of the guy on Twitter who lost N150 million he got from people in a forex scam, marketed by a guy he met at N power training.

How can a normal person entrust a total of N150 million to a guy who went to N power training due to joblessness to be paid 40 k per month after the training

What was even his purpose of sourcing for the N150m in the first place?. Just imagine an N power applicant now gave an advise to somebody that raised N150m. The guy must be an idi*t.

Lazyyouth4u:


The bolded is not project finance o

Professor Nnaji of Geometric and Philip Iheanacho of Azura were not billionaires but secured equity and debt financing with well structured projects. Connections, yes. Wealthy, not necessarily.

By the way, such funds are not paid to the sponsors’ accounts. They are paid into the project accounts. Adequate checks and balance mechanisms are in place by the lenders to ensure the sponsors don’t japa with the money.

The project may fail for other reasons linked to market or operations. But not chopping of the funds by the project sponsors.

Track record, your cash flow and networth are important.

No matter how brilliant your business idea, I don't think a bank will just finance your N1 billion project especially if that is your first loan from the banking system

NL1960:


What was even his purpose of sourcing for the N150m in the first place?. Just imagine an N power applicant now gave an advise to somebody that raised N150. The guy must be an idi*t.

Greed sells, unsustainable high yield Investments sells, easy money sells

People gave him money because of the 20% monthly income he thought he could make from the forex Investments

NL1960:


Dangote is building a refinery which is to fill an area of need. Giving a huge loan based on the building of fuel depots for the sole purpose of fuel importation and storage is super risky because there is no guarantee that a government will not come in to fix the refineries. Well, Buhari came in and made only NNPC to import and also gave a license to Dangote to build a refinery. BUA is also building.

obj gave 19 firms license...

emmanuelewumi:



Track record, your cash flow and networth are important.

No matter how brilliant your business idea, I don't think a bank will just finance your N1 billion project especially if that is your first loan from the banking system

They will if you have a strong project with solid contracts with credit worthy counterparties. Project financing loans are not personal loans.

Basic example: If I can get a long term supply contract from Shell to supply gas to me and I’m able to get Dangote to sign a long term offtake for the processed gas, most local and international banks will be more than glad to provide financing if I also have solid EPC and O/M contracts from reputable contractors. I will simply take the same contracts to Actis or AFC to provide equity which they will gladly give.

This structure does not require any personal guarantee from me provided I have strong counterparties. Many promoters have used this structure to secure financing from banks. The koko is the connections to secure these contracts. Not money in your bank account

I don come back.Normal Investment discussion has surfaced.

igbizen:
I don come back.Normal Investment discussion has surfaced.

Are you sure? What have they been having in the last 4 weeks?


But Treasury Bill is still low

igbizen:
I don come back.Normal Investment discussion has surfaced.

Nah make madam sholapey and the rest of the guys in the thread come back ..... Good to hear Oga Ahib Emmanuelewunmi , lazyyouth and others ..... Thank for all you do here