Vivien Shobo: ‘Women should be mindful of funding they accept so that it does not end up crippling their businesses’
Vivien Shobo, till recently, was the Chief Executive Officer, Agusto & Co, Nigeria’s foremost Credit Rating Agency. She led the firm’s African expansion initiatives by obtaining Credit Rating Agency licenses from the Capital Market Authorities of Kenya and Rwanda. A frequent speaker at domestic and global African capital market conferences, she has over 30 years experience in the financial services sector. Vivien holds a B.sc in Accounting from the University of Benin and an MBA (Finance) from the Manchester Business School. A Fellow of the Institute of Chartered Accountants of Nigeria (ICAN), she has also attended management and leadership programs at esteemed institutions, including Harvard Business School, Wharton Business School, and the Lagos Business School. Her contribution to the development of the Nigerian financial market has seen her serve on various committees including the Securities and Exchange Commission’s financial literacy master plan committee, fixed income sub-committee, and the capital market literacy/investor confidence sub-committee, where she was the chairperson. She also served as chairperson of the association of Credit Rating Agencies of Nigerian. In this interview, she talks about credit ratings and its importance to the capital market, bringing in more women into the industry, developing the nation’s financial market, why women-owned businesses must be careful when obtaining loans amongst other issues.
Give us a peep into your early years and education, how was your growing up like?
My father was a renowned doctor and professor of pediatrics at the University of Benin Teaching Hospital and I grew up on campus with other campus children, which was a lot of fun. I was never short of friends and established strong bonds, which exist till today.I attended Federal Government Girls‘ College Benin City, which is down the road from the university campus and later crossed over to the University of Benin, where I obtained a degree in accounting. I am a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN) and also have an MBA from the Manchester Business School.
Take us through your career journey, where did you start from before ending up at the top?
I started training as a chartered accountant, which, if you have a degree in accounting, is a natural progression. After qualifying as a Chartered Accountant, I went on to work in the then Chartered Bank, where I spent six years before joining Agusto & Co. While working in Chartered bank, I attended an Agusto Financial Analysis course and did very well. As a result, my boss at the time moved me from banking operations to corporate banking where I was a relationship officer to large corporations like Nestle and Michelin. I became an expert in financial analysis, and when I was ready to leave the bank, I got offered a job at Agusto & Co, which I was very excited to take because I had headed the newly set up financial analysis unit in Chartered bank. Financial analysis is something I enjoy thoroughly. Numbers tell a story about the historical and future performance of companies you are reviewing.
I joined Agusto&Co in 1998, and I spent 21 years there without realizing it. When you are busy, time goes by very quickly, and our market evolved rapidly. Agusto&Co established its reputation in the mid-90s when a significant number of the banks that we rated as high risk went into financial distress and went into liquidation. We also experienced the 2009 banking crisis. I remember visiting a particular bank, and the MD was very unhappy with me and asked me if I was God, as we had predicted a decline in their financial performance. But if you understand the economy well, you can forecast the impact of macroeconomic indicators on institutions. A couple of weeks later, I ran into him, and he apologized and confirmed that the things we said were going happen had come to pass and that they needed to make an additional provision for their non-performing loans. Agusto & Co commenced business in 1992, and I joined in 1998 as a senior analyst responsible for bank ratings. I became a manager in charge of bank ratings in 2000, the executive director 2003, and managing director in the same year.
Can you tell us in detail what working in the capital market entails?
Companies can raise capital via equity or debt in the Nigerian capital market. These markets require a broad range of professional parties, including credit rating agencies, which was my area of expertise. Globally, credit rating agencies are critical infrastructure in any debt capital market. When an organization raises debt via a bond or commercial paper, the major investors in those instruments are usually institutional investors, that is, pension funds, foreign investors, insurance companies etc. Before investing, these institutional investors often demand the rating of the organization raising debt capital. They seek to find out if it is an investment-grade or speculative-grade instrument. They also want to establish what risks are inherent in those companies, and the role rating agencies like Agusto & Co is to provide these ratings. It is the global best practice for any institution seeking to raise debt capital to get rated. Agusto & Co has worked extensively in the development of the Nigerian Debt Capital Market and has rated most of the significant transactions, including the most recent Lagos State Government Series III bond issuance.
Is it safe to say that this industry is male-dominated? How do you intend to attract more women into it?
Generally, I would agree with you. However, there are a good number of women at the senior level, on the Capital Market Committee, including the SEC Director-General. The CMC comprises of capital market operators. A good number of CEOs are women, but yes, there is room for improvement. Within each institution, women should be deliberately encouraged to rise to the top. For more women to participate in the market, organizations should create a conducive atmosphere for women to thrive. Women have other responsibilities besides their jobs. Organizations should recognize this and set up in such a way that they allow women to succeed in all aspects of their lives. Some organizations will say ‘oh, women will go and have babies.’ Yes, women have babies, but they come back, and they work hard. When a woman thrives, she can excel and rise to the top. At Agusto & Co, I recently handed over to another woman CEO, Mrs. Yinka Adelekan.
You have over three decades of experience; how would you describe your journey?
It has been an exceptionally very fulfilling journey, particularly the last 21 years at Agusto & Co. and I’m happy with all we’ve been able to achieve. It is not easy to keep a company growing for so long in this environment, particularly with disruptive policies. I’m delighted I’ve been able to hand over a thriving company that is the market leader.
Has there been any experience that threatened to derail you at any point in time?
Yes, the 2009 banking crisis. It did not threaten my journey, but it did threaten our business. In the long run, it was good for the market but was a challenging time for a company like ours, whose activities are linked to the fortunes of the banking industry. Overnight, our client base shrunk from 120 to 26. That year, there was so much uncertainty that adversely impacted all aspects of our businesses. Banks stopped spending to preserve capital. You can imagine the impact on business and even the years that followed, as the market settled. Overall, it has been good for the market, but getting there was quite difficult and threatening to several businesses. Overall, I am happy we came out successfully.
As we move higher in the upper echelons of many companies, we tend to see fewer women. Why is this do and what do you think can be done about it?
Women drop out for various reasons. They go to have a family and some choose not to come back. Some cannot balance the responsibilities of full-time employment with motherhood effectively. Working hours in some organizations are brutal. They work weekends and have meetings at 7am. At some point, some women decide it is not worth their while and choose to go on do other things. However, statistics show that SME businesses are women dominated as many women move out of the corporate world into entrepreneurship, where they are in better control of their destinies and time, running their businesses as opposed to going to work and having to report to somebody who expects them at work on Saturdays and Sundays. I think part of the reason why we do not see many women at the top is the absence of a conducive environment for women to thrive in some organizations.
Most women at the top have deliberately gone and taken a hammer and smashed the glass ceiling. They have chosen to be there, worked very hard to get there, and stay there. When you speak to most women in leadership in Nigeria, they have experienced biases in one form or the other. I have been for a meeting in a particular part of the country when the CEO of the organization refused to look me in the eye when speaking to me; he kept talking to my junior male colleague. You get subtle bias all the time in different ways, but you have to choose to succeed and on your terms.
As someone with a solid background in finance, what is your opinion on women not obtaining institutional funding for entrepreneurship?
A good number of funding programs for women exist. However, everyone, especially women, should be careful with the funding they take on. Many businesses cannot use debt efficiently, and the high cost of debt far outweighs the benefit. The cost of debt is high for many companies to absorb, along with the high operating cost. The CBN is trying to bring down the lending rate, but the inflation rate remains a big problem. Women should be mindful of funding they accept so that it does not end up crippling their businesses. The second thing is that before obtaining debt funding, certain boxes must be ticked. Debt is not free; it is not a gift, except it is a grant. My advice to women trying to raise finances is first to put their company and books in order. Anybody offering you financing would like to see a good track record of your business, proper audits, credible financial statements as well as projections, business plan, and so on. Credit is not about whom you know; it is about putting your books in order, having a track record of sustainability in terms of revenue and profitability, and approaching to the right institutions. If you speak to most successful women, I dare say that they can get finances because their records speak for themselves. Quite frequently, I ask some women entrepreneurs what their annual revenues and profits are, and they do not know.
How important is a mentor for career and personal growth?
I think every woman should have someone they look up to and can call on for advice on specific issues as they arise. It is essential to learn from people that have journeyed where you are going. In my time, there was little talk of mentoring and no proper support for women. Now there are women organizations such as WIMBIZ, WISCAR etc with excellent mentoring programs. I am quick to latch on to any organization that promotes and supports the well being of women in business.
Do you think more women are shattering the glass ceiling today?
I believe so. The younger women are not waiting for anybody. They are going out with hammers and shattering obstacles insight; they are more deliberate and not as reserved as my generation. Women have more support groups and organizations that help.
You say you are passionate about developing the Nigerian financial market, what are some things you’ve personally done in this regard?
My contribution to the development of the financial market in Nigeria, over the years, has involved training many people via Agusto Training, which pioneered formal training of bankers in Nigeria. Besides, I was on the Initial committee that worked on the financial literacy aspect of the capital market master plan. The implementation team is in the process of rolling out a curriculum to introduce the financial market into primary and secondary schools across the country. Across Africa and in the UK, I have spoken at several conferences and workshops promoting the Credit Rating Culture and the need to replicate the model we have here in Nigeria. One of the things we are doing via the Association of Credit Agencies of Nigeria is promoting financial literacy via the benefits of the work we do in the rating space. When investors are informed, they can make better decisions that will positively impact the market.
Tell us something that you did/do that has influenced your career positively?
Looking back, doing an MBA at 40 was a brilliant idea. Combining this with being the CEO of a company and raising my young children was not very easy. However, the knowledge I gained from the program has been advantageous in not only running the company but also in building me personally.
You’ve spoken at several conferences around the world, how would you rate Nigeria’s capital market in comparison with other countries?
If you look across Africa, Nigeria and South Africa, have the most developed credit rating industries on the continent. We are in East Africa, working to replicate the model we have here in Nigeria there. I believe in the Nigeria Capital Market operates in line with global best practice.
What would you tell a woman that wants a seat at the table?
I would tell her first to know her onions well, i.e., be very good at what she does. When you know your onions, people would call you to come and sit at the table. That has been my experience as well as that of many women I know. Whatever your chosen occupation, be an expert in that field. Go above and beyond the call of duty. Go on the internet, do a course, talk to other more experienced people. You have to be deliberate about sitting at the table, as most people do not want a mediocre sitting with them.
Life at this level can be hectic and stressful. How do you disengage and relax?
I love traveling, and I am a plant collector. I am deliberate about enjoying myself, and this means going out with friends, traveling, spending time with my family, and so on. I find my happy place, and I stay there. My garden is one of my pleasant places.
Where do you receive inspiration, how do you stay motivated?
I receive my inspiration from God Almighty, who has been extremely good to me. I also have a very wise and supportive husband who has been my pillar and encouraged me in all aspects of my life, especially in my career.
What would you say to any woman that is reading this and has been inspired by you?
Do not give up, stay strong, focused, and be very resilient. If need be, use a hammer and smash that ceiling and pass through.
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