Annual Letter 2018

To Stakeholders of Prairie Crossing Capital Management Ltd.

As we usher in another year, we like to reflect on the past twelve months. A sort of stock taking, before continuing the journey. The major question we at Prairie Crossing ask ourselves each year is, were we able to improve the quality of life for Nigerians? 

On the macro level, nothing much has changed for the average Nigerian. The economy is growing at 1.81%, inflation rose by 11.44% YoY. Terrorist attacks persist in some parts of the Northeast, government workers continue to go on strike. In our own little way, we choose areas to work on that, when done right, would have a significant multiplier effect.

The first is to help businesses run better, and the second is to promote youth development. Investing in these two focus areas could change the quality of life for Nigerians – at least that’s what we think.

In 2018, we barely made a dent in the quality of life “index” of Nigerians. However, we believe that some of the services and products we started this year, have in them the right ingredients to scale and impact more lives. With that in mind, here are the highlights of 2018: 

We kicked off our lending operations this year. The logic behind this was to provide micro financing for small businesses to help them meet specific needs.

Many small business, 3 to 5 years in, find it difficult to raise short term finance from traditional sources, despite their decent financial standing. The time between application and funding was mentioned as one of their pain points.

Starting from August 2018, we provided eight loan facilities to seven companies/projects. Our average loan amount was ₦500,000, and average tenure was 3.5 months. For loans we gave, average time from when we received application to when we funded was 5 days. 

In 2019 we plan to standardize our review process, and be more hands on in assisting borrowers in management of loaned funds.

Our portfolio company Aspire Digital Labs Limited closed the year with revenue of ₦1.2 million, crossing the million naira mark. The firm missed some of our 2018 targets, mostly due to growing receivables (a pain in the neck for many small businesses), fortunately we’ve been working on some measures to curb unnecessary bottlenecks in payment collections, and subsequently turn the company profitable in 2019.

We launched our Financial Management Services, which includes: virtual CFO services to small businesses, valuation, and M&A advisory. Entrepreneurship can be a lonely and tasking journey.

Founders find themselves changing between a hand-held microscope, and telescope every other second. That is, having to be attune with the smallest details of their company one moment, and the next, detaching, to ponder on innovative disruption, and the future of their sector.

We hope that our financial management services provides the necessary complimentary skills to the C-Suite of small businesses.

We supported three great community programs this year with volunteer hours and/or financial donations.

The first was ATIDE, a social enterprise, we supported in their renovation of two low-income primary schools in Bariga, Lagos.

The second, Food Clique, an NGO set out to eradicate child hunger, held a community kitchen in November which we volunteered at. They were also recipients of our GuysWhoCook charity fund raiser.

The third, was a donation (we paid for 3 tickets to their fund raising comedy night) to the Joyful Joy Foundation, a non-governmental organization focused on combating malaria in Nigeria. 

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