Back to the Early 90s: The Wild West of Nigerian Finance

The early 1990s in Nigeria were a chaotic but exciting time. Under General Ibrahim Babangida’s government, the finance industry became a gold rush—open to anyone bold (or reckless) enough to enter.
We were mostly in our early and mid-twenties, full of ambition but short on real financial experience. With little more than charm and confidence, many of us were suddenly Managing Directors of finance companies, handling millions in public deposits.

Looking back, it still amazes me that older, wiser men who had spent decades building their wealth trusted their life savings to kids like us. As my father often said, shaking his head in disbelief:

“What do you know to suddenly become the Managing Director of a Finance company?”

He was right, of course. My father had trained me to be a lawyer, not a financial wizard. But the lure of fast money was irresistible. I was determined to grab my share, even if it meant learning painful lessons later.

The “Easy Profit” Illusion

At the time, starting a finance company was almost laughably easy.
All you needed was a name, an office, and a few attractive young marketers who could convince people to deposit their money with promises of high monthly returns—5% or 6%.

What did we do with that money?
Most companies didn’t even bother with real investments. Instead, they simply re-deposited those funds with another finance company offering 10%–12% monthly interest.

So, without lifting a finger, you could make a paper profit of 4%–6% every month.
It was legal, easy, and completely unsustainable.

Others dabbled in forex arbitrage—buying dollars at bank rates and reselling them at slightly higher parallel rates. Back then, the spread was about ₦2 per dollar. Today, the difference can exceed ₦300! Compared to today’s “financial engineers,” we were amateurs.

Still, the industry was booming. Money was flowing like a river, and everyone looked like a genius—until the music stopped.

Enter Forum Finance: The Beginning of the End

Then came Forum Finance, the Goliath of the finance industry.
They offered 15% monthly interest—an insane rate even by the reckless standards of that era. Forum became the favorite place for smaller finance companies to stash their deposits, including ours.

Initially, my team and I were skeptical. We couldn’t understand how they could sustain such returns. We held a meeting and agreed not to invest with Forum Finance.
But greed—and the crowd—eventually won.

At some point, while I was out of town, my team decided to place a large portion of our deposits with Forum. When I returned, I discovered it—but instead of reversing the decision, I let it stand.
It was my failure in leadership. I take full responsibility for that.

When Forum Finance collapsed, it took down over 80% of the finance houses in Nigeria, including First Aid Finance Limited. Overnight, millions were lost. Depositors panicked, the police got involved, and lives were ruined. It was one of the darkest chapters of my entrepreneurial journey.

The Painful Lesson: Stay in Your Lane

Looking back, the lesson is crystal clear: never follow the crowd at the expense of your competence.
We had our own profitable model—using deposits for international trade and hosting business seminars. But we abandoned it to chase the herd’s illusion of quick profit.

We forgot that real business growth is built on understanding, not imitation.
When you operate outside your area of competence, even good luck can’t save you for long.

Key Entrepreneurial Takeaways

• Stay in your lane. Don’t invest in what you don’t understand, no matter how profitable it looks.
• Beware of crowd mentality. When everyone is rushing in one direction, pause and ask: What do they know that I don’t—and what don’t they know that I do?
• Leadership means saying “no.” Even when others are making money, hold your ground if your instincts say otherwise.
• Competence compounds. Focused mastery builds confidence and sustainability; shortcuts only build illusions.

Closing Reflection

I lost my first company because I tried to be part of the crowd.
But in that failure came wisdom. I learned that success isn’t about chasing trends—it’s about trusting your experience, skills, and values.

Every entrepreneur faces that fork in the road: follow the crowd or follow your compass.
Choose your compass. Every time.

My Entrepreneurial Affirmation of the Day

“I will not chase the crowd. I will build from my competence and lead from conviction.”

Closing Charge

The crowd moves fast—but wisdom moves steady.
Be the one who stands firm when others run wild. That’s how real legacies are built.