Post By:
McBrandon Business Consulting
Even though
experts generally agree that finance is not the biggest problem facing Nigerian
entrepreneurs, many of them still believe that it still ranks among the first
five.
Understanding
the critical importance of funding to Nigerian business owners and entrepreneurs,
Start-Up Digest, in its characteristic manner, has dug up some of the
easy-to-get funds available in the country this year.
Criteria
The general
criterion for accessing these funds is the capacity to present a bankable and
viable business plan. The entrepreneur should be clear on where he wants to be
in the near future, and must also be able to describe the market for his or her
products.
If there is
anywhere entrepreneurs can get cheap or single-digit funds (often at nine
percent lending rate), it’s from the Bank of Industry (BoI).
This
development finance institution (DFI) has been rated by many local and
international agencies as one of the best managed banks in the world.
The BoI has a
number of funds that entrepreneurs of all levels can access. First is the
Graduate Entrepreneurship Fund (GEF), which is meant for serving members of the
National Youth Service Corps (NYSC). Candidates are allowed to submit their
business ideas, which are then reviewed by a team of experts. The NYSC members
whose ideas are marketable and bankable are then selected, trained for four
weeks and then given between N500,000 and N2 million.
There are also
the Cottage Agro Processing (CAP) Fund for small and medium agro processors;
Nolly Fund for players in the Nollywood industry, as well as Fashion Fund for
designers and other players in the value chain.
In fact, the
bank has other matching and managed funds, including a fund for the automotive
industry. Through 122 business development experts, entrepreneurs can access
funds easily. It is also easy to access some of the bank’s products through its
website.
The bank has a
N5 billion fund from Africa’s richest man Aliko Dangote to finance SMEs at a
single digit rate.
“We want to
continue to create opportunities for Nigerian entrepreneurs and support the
industrialisation efforts of the government,” said Waheed Olagunju, acting CEO
and MD of BoI, at a forum in Lagos in 2016.
Tony Elumelu
Foundation has $100 million for 10,000 African entrepreneurs. This will
continue to be available for another seven to eight years. If you are in
agriculture, fashion and design, light manufacturing, ICT, and solid minerals,
among others, then apply for the on-going Tony Elumemu fund. You can be
lucky to be one of 1,000 entrepreneurs to be shortlisted.
Through the
Elumelu fund, Momarr Mass Taal, the CEO of Tropingo Foods in The Gambia, who
got $5,000 seed capital in 2015, turned his enterprise into a $1.2 million
revenue business.
GroFin, a
development financier, has committed over $500 million to funding Nigerian
micro, small and medium business (MSMEs) across the country.
The firm has
five different types of fund: the Aspire Nigeria Fund, the Growth Africa Fund,
the Small Growing Business Fund, the Aspire Small Business Fund and the Aspire
Growth Fund.
The Aspire
Nigeria Fund, the Growth Africa Fund and the Small Growing Business Fund cater
for all parts of Nigeria except the Niger Delta.
The Aspire
Small Business Fund provides a minimum of $100,000 and a maximum of $1.5
million to SMEs in Nigeria.
The Aspire
Small Business Fund and the Aspire Growth Fund cater for the Niger Delta.
The Aspire
Small Business Fund provides between $10,000 and $100,000 to small business
owners in the oil-rich region, while the Aspire Growth Fund frees between
$100,000 and $3 million to businesses to stimulate growth in the area. GroFin
provides its funds mostly for a maximum of six years.
Shell LiveWire
The Shell
Petroleum Development Company of Nigeria Limited has a number of funds for
young entrepreneurs, including women.
Through the
programme , Shell provides support, access to training, guidance, and business
mentorship to young entrepreneurs and potential entrepreneurs between the ages
of 18 and 35.
The programme
operates mainly in the Niger Delta region and aims to inspire, encourage and
support young people to start up their own businesses through the provision of
finance and training for young entrepreneurs, according to Shell.
Lagos State
Employment Trust Fund
Lagos State has
N25 billion to support SMEs. The fund is divided into two categories; micro and
small businesses. Under the micro, businesses can access up to N500, 000 loans
with an interest rate of five percent and a tenor of one year. For the small business
category, businesses can get up to N5 million for a tenor of three years. The
criteria for accessing the funds include: membership of a business
organisation, which will recommend the business for the loan; Lagos State tax
receipt for at least six months, and Lagos state residency card. This takes
three weeks for processing.
“There are
various funding available to owners of small businesses. In our business
organisation we have access to the government Social Intervention Fund, Lagos
State Employment Trust Fund and the Bank of Industry micro lending fund,” Femi
Egbesola, national president, Association of Small Business Owners (ASBON),
told Start-Up Digest.
Social
Intervention Fund of FG
A total
of N6 billion was allocated under the Social Intervention Fund of the 2017
budget. The criteria for accessing the fund include membership of a business
organisation. The fund is for artisans and owners of micro businesses. The
artisans of business owners can only access a maximum of N100, 000 at three
percent interest rate on a year tenor.
Oxfam has a
number of funds for Nigerian entrepreneurs.Oxfam, an international
confederation of charitable organisations focused on the alleviation of global
poverty, recently disbursed €100 million to high-impact SMEs in Nigeria through
Nextzon.
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