Lack Of Structure, Regulation, Transparency Hindering Nollywood Financing

Experts reviewed major obstacles to funding Nollywood initiatives during the National Focus Group on Culture Conference, which was organized by the Nigerian Economic Summit Group (NESG), UNESCO, and the Federal Ministry of Arts and Culture (FMAAC).

Nkechi Nwuka, general manager at the LED Directorate, Bank of Industry (BoI), and Dr. Victor Okhai, president of the Directors Guild of Nigeria, cited informal business practices, a lack of transparency, ignorance, and difficulty accessing funding information as the main obstacles impeding Nollywood's growth, particularly in comparison to sectors such as Bollywood and Hollywood.

Okhai claims that despite being the second-largest film industry globally, with 2,000 films produced each year and N600 million in income, Nollywood's contribution is still far smaller because of a number of internal issues.

Among these difficulties include informal commercial practices, in which agreements are reached by handshakes or word-of-mouth rather than formal contracts, and the frequent creation of films for websites such as YouTube. Potential investors are deterred by this lack of organization and transparency.

Okhai also brought attention to problems such as copyright infringement, the lack of industry regulation and structure, piracy, and the absence of financial instruments specifically designed for cultural and tourism-related enterprises in financial institutions.

Okhai stated, "We don't have financial provisions that are specifically designed for us (creators and filmmakers) in a way that we can effectively access them." "Nollywood's structure needs to be formalized, and data-gathering services are required to compile and distribute information to investors and policymakers."

Nwuka, on the other hand, pointed out that ignorance and inaccessibility of information are big impediments limiting filmmakers from receiving available financing.

She shared findings from BOI’s first financial intervention geared at the cinema industry, highlighting that many creatives lacked expertise of how to access finance. She noted shortcomings such as filmmakers requesting for loans without business plans or suitable financial strategies in place to support their projects.

Creatives frequently fail to provide the necessary collateral and lack any kind of repayment plan.

Some people think it's government funds. However, as the procedure progressed, the majority withdrew when it became evident that they would need to pay back the loan.

In a similar vein, she noted that the main obstacles to creatives' ability to obtain bank loans were financial theft and a lack of cooperation.

"Some of our clients struggle with money diversion. On the other hand, individuals that persevere and use the funds wisely are exceptional. This motivates the bank to take further action.

Similarly, we discovered that many creatives are attempting to obtain these loans on their own, with very few partnerships and joint ventures. Over time, this has gotten better," Nwuka said.

The National Focus Group On Culture virtual conference brought together stakeholders in Nigeria's culture industry to discuss the challenges facing the culture, offer solutions, and encourage cooperation among the various stakeholders in the ecosystem of the cultural sector as it transitions to a sector that generates economic contributions to the country's GDP.