Access to finance is at the top of the list when it comes to entrepreneurship. While some business owners are not aware of the legitimate platforms for SME funding, others are not certain if they are eligible to apply for available opportunities.
First of all, It is important that we highlight the difference between grants and loans. A grant refers to any non-refundable amount of money that is given as a donation or award by a government, firm or individual for a particular project- which in this case, would be for business purposes. A loan on the other hand, requires you to repay a certain amount of money (plus interest) that is borrowed from a person or organization after an agreed amount of time.
Without further ado, here is a list of some of the trustworthy funding sources for entrepreneurs in Nigeria:
The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) was established in 2003 by the SMEDAN Act to promote the development of micro, small and medium enterprises in Nigeria.
Athough SMEDAN does not directly provide funds, it functions as an intermediary, linking small businesses with grant/loan providers.
The agency partners with government institutions, such as the Bank of Industry (BOI) and the Central Bank of Nigeria (CBN) in providing credit to small enterprises. Collaboration is not limited to the public sector as SMEDAN also aids small businesses in accessing funds from the private sector such as entrepreneurship foundations, and commercial banks.
- To apply for credit via SMEDAN’s initiatives, your business must be registered.
- If you’re applying for a loan from a commercial bank, SMEDAN will notify you of their lending criteria which should be adhered to.
Launched in 2015, the Tony Elumelu Foundation Entrepreneurship programme has grown to become one of the largest SME empowerment initiatives in Africa.
Founded by investor and philanthropist, Tony O. Elumelu, C.O.N, the mission of the TEF Entrepreneurship Programme is fully to focuse on a $100 million commitment to support African business owners over a period of 10 years. Thus far, the Tony Elumelu Foundation through its TEF Entrepreneurship programme has trained, mentored, and funded over 10,000 young African entrepreneurs across all 54 African countries.
Successful applicants receive business training, a non-refundable seed capital up to $5,000, and global networking opportunities.
- The Programme is open to all Africans operating businesses in Africa who are aged 18 years and above, and who must not be considered a minor in their country of residence.
- Applicants must have the legal right to work in the African country where their businesses are located.
- Applicants must create an account and complete an online entry form through the TEF Hub to apply for the Programme.
- All businesses must be business Ideas or early-stage registered entities, with 0 to 3 years of operations from the date of commencement.
- Business Ideas must be for-profit, focused on one business only, and must be the original work of those applying.
The Lagos State Employment Trust Fund (LSETF) was estabished in 2016 by the Lagos State Employment Trust Fund Law 2016 to tackle unemployment and boost entrepreneurship in Lagos State.
According to LSETF official website, the platform was launched with an initial capital of N25Billion. Over the years, it has empowered Lagosians with innovative programmes.
The LSETF stimulates entrepreneurship by improving access to finance and markets, strengthening the institutional capacity of MSMEs, and implementing policies designed to enhance the business environment in Lagos State.
Through strategic partnerships, the Fund pursues its objectives with assistance from sources such as development agencies, corporate organisations and individuals.
- As a business owner, you must be a registered resident of Lagos state.
- You must be between18-35 years.
The Bank of Industry (BOI) is Nigeria’s oldest, largest and most successful development financing institution. It was reconstructed in 2001 out of the Nigerian Industrial Development Bank (NIDB) Limited, which was incorporated in 1964. The institution effectively provides long-term financing to the Nigerian industrial sector.
The BOI has introduced some notable intervention schemes such as the Government Enterprise and Empowerment Programme (GEEP) loans, the MSME Survival Fund, the North-East Rehabilitation Fund, the World Bank 750 million dollars NG-CARES programme, and more.
- You must have a registered business to apply for BOI credit facilities
- You must have a profitable business idea
- You must be between 18-35 years
GroFin helps entrepreneurs with business loans and support to grow their businesses. Headquartered in Mauritius, the platform offers financing to SMEs in 14 countries in Africa and the Middle East. GroFin is supported by 34 international finance institutions, development organisations, and private funders who have committed nearly $540 million in capital thus far based on information found on its website.
- Your business must be in any of the following African countries: Ghana, Nigeria, Egypt, Kenya, Tanzania, Rwanda, South Africa, Zambia, and Uganda.
- The business must belong to you.
- Your business must have a turnover of 1.5 times your loan amount.
- You must have been operating your business for 2 years or more.
- Your business must be profit-oriented.
- You will need collateral to secure the loan.
These are some of the platforms and institutions that are truly committed to providing SMEs with funding to start or grow their businesses. Have you applied to receive grants or loans from any of them? How was the experience?