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The National Bureau of Statistics (NBS) 2017 national survey of MSMEs shows that 89.6% of the surveyed SMEs rated lack of access to finance as the most important encumbrance in the area of major challenges of business development. Every business has its stage of growth, optimising and matching the right type of funds needed at every stage of growth is important for growth and sustainability. A lot of business got wiped out due to poor financial management, mismatch of funds with needs (e.g using short term funds to fund long term assets without a good cash flow), over trading, using very expensive loans for thin margin business etc. The good news is that in spite of many constraints, it is still possible for MSMEs to access funding for their business. Here is a list of funding opportunities for your business:
- Personal Savings
- Friends & Family Members
- Grants: Government grants and International Donors Grants
- Trade Finance/Buying on Credit
- Receiving Advanced Payments
- Equity
- Borrowing from Finance & Investment Houses
- Venture Capitalist/ Angel Investors Funding
- Bank Loans
- Specific Government Intervention and Funds (Grants, low or no interest)
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A good place to start for a lot of MSMEs is to even start proper records/bookkeeping and good and separating their personal finance from that of their business. They should place themselves on salaries. General consideration for accessing most of these funds is the capacity to present a bankable and viable business plan. There might also be an emphasis on prudent project selection and management, attraction & support is usually high for viable quality projects with potential development impacts. The information they say is power, you can check for more funding opportunities online; GOOGLE is your friend. You can also get qualified, tested and trusted consultants to assist you or maybe with access packaging. In conclusion, the knowledge and understanding of money management, financial products and services, good financial behaviour and their application in making effective financial decisions for business or dealing with everyday lives are very important.
What To Do: Go for it!
Remember to check available opportunities online, discuss with your business association, relevant government agencies of business development consultants to explore possible and available opportunities. Featured Image Source: Entrepreneur ReportersGot a suggestion? Contact us: editor@connectnigeria.com
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Very educating article, I hope to get more and better information.