YouWin Nigerian program is giving away free money for economic development: Planet Money: NPR

Lariat Alhassan had a lot of great paint to sell, but no office to meet customers. And then she heard an ad on the radio that seemed too good to be true. Hide caption courtesy of Lariat Alhassan

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Courtesy Lariat Alhassan

Lariat Alhassan had a lot of great paint to sell, but no office to meet customers. And then she heard an ad on the radio that seemed too good to be true.

Courtesy Lariat Alhassan

Note: This episode originally ran in 2016

Lariat Alhassan owned a small paint shop in Abuja, Nigeria. Things weren’t going well. She didn’t have an office. She was selling paint from the trunk of her car. But one night when Lariat was listening to music in her room, she heard an ad on the radio. At first she was sure it was a scam. The Nigerian government was said to be offering millions of dollars to businesses with virtually no strings attached.

It wasn’t a scam. This was an experiment that the Nigerian government took up. A competition designed to help the country’s smallest companies grow. If it works, it could help solve the massive youth unemployment problem in Nigeria. And it could also suggest solving a major economic puzzle in the developing world: How do you turn a small business into a medium-sized company that could become a large company? If you solve that, you will create jobs, wealth, and all sorts of other benefits.

There are tons of entrepreneurs looking to grow their business in developing countries, but most of their businesses cannot grow past a staff or two. The big thing they need is money – but if you’re a bank looking to take out a loan, how do you tell a good two person paint shop like Lariat apart from a bad one? How can you predict who will wisely use the money? These loans end up looking very risky, and as a result banks often don’t lend at all, or if they do, they charge a ton.

But if someone could figure out how to differentiate the boom-ready small businesses from those about to go bankrupt, they could help solve these big puzzles like unemployment and the fight against poverty.

Nigeria had a plan. They would have a massive nationwide competition. You would be spending a ton of money like no one had done before. And Lariat was there.

Music: “Family Summer Reunion”, “Po ‘Boy” and “Yoruba Funk”.

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