Why investors chose dollar over naira investments –Lukefield Finance boss

As Nigeria’s economy begins to show tentative signs of improvement, with inflation easing and the naira gaining stability, many Nigerians are yet to feel any real relief. In this interview, the Chief Executive Officer of Lukefield Finance Company, Omotayo Asupoto, explains why she believes the economy is gradually recovering, the ways her firm is assisting SMEs through transparent and affordable financing, and why patience is essential for a lasting rebound. OLUWAKEMI ABIMBOLA present excerpts

What gap is Lukefield Finance addressing in a crowded financial market,?

The financial industry is vast, with numerous players operating across various sub-sectors. Our own area is the finance company sub-sector, which plays a very important role in the broader economy. We sit between the commercial banks and the microfinance banks. There are activities our licence permits and others it restricts, and I’ll start with what we are not allowed to do.

We are not permitted to trade in foreign exchange or take deposits, meaning we cannot accept current or savings account monies. However, we are allowed to take funds from customers in the form of borrowings. We borrow from customers and then lend to those who require financing. We are also restricted from activities outside our licence scope, such as stockbroking or project management. In simpler terms, once you remove those three broad functions that banks can engage in, we can do almost everything else, consumer loans, leases, factoring, invoice discounting, LPO financing, retail loans, and so on.

To your question: our licence positions us to fill a critical gap. When customers approach big banks for loans, many of them do not handle financing such as LPOs. Even when they do, the bureaucratic approval process often takes too long. In our case, operations are compact, and decision-making is quick. We also focus heavily on SMEs, recognising that many do not have extensive collateral, which big banks typically insist on. We understand these businesses, move quickly, and support them in improving their operations.

This is the value we bring: speed, personalised interaction, and a deep understanding of each customer’s business. And unlike big banks that insist on audited financial statements, we can assess customers based on their bank statements and still make sound judgements.

On the liability side, because we do not take current or savings accounts, our cost of funds is higher than that of banks. However, discerning customers who want to invest for 60, 90 or 180 days often bring their funds to us rather than leave them in bank accounts at low interest. So, on both sides of the balance sheet, we provide value to our target customers.

How do you manage the negative perception caused by unscrupulous lenders in your space?

The finance company sub-sector is licensed and regulated by the Central Bank of Nigeria. Loan sharks typically operate without a CBN licence or with only state-level licences. The key factor is where they source funds from. Because we are regulated by the CBN, we are required to file monthly reports, undergo examinations, and comply with strict regulatory oversight. This should reassure customers that we are not a fly-by-night operator.

Which areas offer realistic growth prospects in this sub-sector?

We are accustomed to regulation and have learnt to operate strictly within the law, while still making money. Intermediation is simple: connect those with excess funds to those who need funds. The main issue is risk.

As lenders, the borrower’s character is often even more important than their financials. We are selective in the businesses we work with. Through interaction and assessment, we can determine credibility. Even when someone is forthright, unexpected business downturns happen. But we have a robust risk management framework, clear credit approval limits, and a board-approved credit policy that guides who we lend to, how much, and to which sectors. We also maintain sectoral limits to avoid concentration risk. We comply fully with corporate governance rules, hold quarterly board meetings, send monthly returns to the CBN, undergo examinations, and our auditors, EY, one of the Big Four, ensure that we run our operations properly.

Which part of your company is the main growth driver?

As an accountant, I’ll start with the balance sheet. On the liability side, more than 75 per cent of our funds come from retail customers. We have many high-net-worth individuals who have supported us over the years. Our licence requires a minimum investment of N50,000 per individual. We also attract many civil servants, bank employees, and small-business owners investing between N1m and N2m.

On the lending side, we serve about 13 different industries, including manufacturing, trading, retail, oil and gas, and logistics.

Industry-wide, the regulatory share capital for starting a finance company is N100m, and you can only lend a maximum of 20 per cent of your shareholders’ funds to a single borrower. With N100m capital, you can only lend N20m, which is limiting. Very early, we realised this would not support our long-term vision, so we began increasing capital from year two. Today, our shareholders’ funds stand at N2.9bn, meaning we can lend up to N580m to a single obligor. This allows us to serve large clients, including those who come to us when big banks are too slow to process their loans.

What steps did you take to rapidly boost your capital base?

When applying for a CBN licence, the N100m minimum capital is deposited with the CBN, and the applicant receives a six-month Approval-in-Principle to hire staff and set up operations. We invested an additional N50m to secure infrastructure and personnel. Once the final licence is issued, the N100m is returned.

We chose not to withdraw that N50m but retained it to build the business. However, we soon realised that a N20m lending limit (based on N100m capital) was insufficient, so we raised additional capital. For our first four years, we drew no dividends, reinvesting all profits. We later conducted a second capital call. Today, our share capital is N1bn, with total shareholders’ funds of N2.9bn. We were preparing in anticipation of future CBN capital increases.

Despite signs of economic stability, why aren’t Nigerians feeling it?

You are right, even though the data shows improvement, consumers do not yet feel relief. These things take time. The economy is moving in the right direction. Interest rates, which were at record highs, have stabilised and begun to drop. The same applies to FX. When rates were rising, many people shifted their naira investments into dollars. With exchange-rate stability returning, we are seeing people come back into naira.

We also see improvement in customer transactions. For example, last year the oil and gas sector was slow, but now subcontractors are securing more LPOs. The Monetary Policy Committee recently cut the MPR by 0.5 per cent, and further reductions may come. All these point to gradual healing, but patience is essential.

Given Nigeria’s largely informal economy, how do you reach SMEs and households?

Our licence does not allow us to handle transactions below N50,000, so microfinance banks serve that segment. However, we still support the grassroots indirectly. We recently secured funding from the Development Bank of Nigeria. Institutions like DBN partner with companies like ours, giving us wholesale funds that we then lend to SMEs, especially youth- and women-led enterprises.

We are engaging CreditCorp and BOI on similar initiatives targeting more granular impact. For instance, rather than trying to build a grassroots lending structure ourselves, we are exploring partnerships with solar equipment manufacturers: BOI or CreditCorp would fund us at low rates, we would lend to manufacturers, and then finance the end-users buying their products, at rates much lower than our commercial rates.

We also provide loans to civil servants in Lagos and federal workers in Abuja. These loans are repaid directly from their salaries, making collateral less of an issue.

What role will fintech collaboration play in your growth plans?

We are already envisioning partnerships. One example is our product, Diaspora Delight, designed for Nigerians abroad who want to send money home regularly or save in naira for their December visits. However, because our licence does not permit us to trade FX, we cannot collect dollars directly. Therefore, we are exploring partnerships with IMTOs: they convert customers’ dollars and remit the naira to us for investment. Technology underpins all of this.

With a branch in Abuja, do you plan to expand to other locations?

Physical branches are not always necessary. The Abuja branch was opened primarily to serve civil servants. SME financing is still handled from Lagos. As we grow, we may open another Lagos branch on the mainland. Our five-year strategic plan (2024–2028) includes expanding into asset management, which requires an SEC licence.

We are also considering a transition into commercial banking by 2028, which will require significant capital and partnerships.

Can you share your professional background, particularly your focus on governance and compliance?

I am a thoroughbred banker. My entire career has been in banking. I started at Fountain Trust before moving to Guaranty Trust Bank in 1993, where I worked until 2018 when we started Lukefield. I worked across operations, finance, risk management, treasury, trade services, and even marketing. I also served on the board of the GTBank subsidiary in Liberia.

This broad experience shaped the way we run Lukefield. We were determined from day one to operate at world-class standards. This is why we appointed EY as our auditors; they would not sign off if our processes were not sound.

What hurdles have you encountered in handling personnel over the past seven years?

People issues are constant. I was not the pioneer MD; someone who previously worked with me led the company for the first three years. Neither of us drew a salary for the first three years because we wanted to build the business sustainably. We maintained a lean team and reinvested all profits.

People challenges persist, especially with Gen Z employees. We ran a training school for fresh graduates, training 14 of them intensively for two months. Only four remain. But I learnt from Tayo Aderinokun that when people want to leave, let them go, they become ambassadors for the institution. We train extensively and continuously.

How do you ensure effective collaboration between Gen Z workers and older colleagues?

Early this year, our workforce was heavily Gen Z, and staff turnover was high. We realised this imbalance was unhealthy, so we intentionally brought in more experienced mid-level employees. Our culture is strong, influenced heavily by the Guaranty Trust Bank ethos. We maintain a transparent, performance-driven environment where everyone must pull their weight. My leadership is hands-on; my door is open, and staff know there is no room to hide. We invest heavily in training, including bi-weekly internal seminars that build presentation and analytical skills.

What are your expectations for the Nigerian business environment in 2026?

The year 2026 looks promising. Stability has been achieved; the next stage is growth. The tax reforms are real, and businesses must prepare to be accountable. But these reforms also create new opportunities, for accountants, tax experts, auditors and small consulting firms who will support businesses in meeting compliance requirements.

Across sectors, agriculture, oil and gas, manufacturing, opportunities are emerging. Subcontractors who previously operated at the margins are now receiving direct LPOs. We see this happening already among our clients. The key for 2026 is positioning: doing things properly, planning ahead, and embracing accountability.