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How to access finance for your Small Business in Nigeria by Fayo Williams

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SME (small business) requirements range from start up funds to capital investment and working capital to grow the business. Equipment leasing opportunities, export finance and LPO Financing are other types of access to finance sought by some.

Published in: Business, Economy & Finance

How to access finance for your Small Business in Nigeria by Fayo Williams

  1. 1. HOW TO ACCESS TO FINANCE TO GROW YOUR BUSINESS By Fayo Williams (Mrs.) ILO Certified SIYB Master Trainer and EXECUTIVE DIRECTOR, RELY SUPPLY LTD. 08034030366 fayowilliams@yahoo.co.uk with materials courtesy How to Access Finance by Fayo Williams 1
  2. 2. Outline 2  What does ACCESS TO FINANCE mean?  Criteria for Business Growth  Current situation with regards to accessing funds  Before Borrowing  How to access finance to grow your business  My experience  Summary and conclusion How to Access Finance by Fayo Williams
  3. 3. What is ACCESS TO FINANCE? 3  Access to finance refers to the possibility that individuals or enterprises can access financial services, including credit, deposits, payment, insurance, and other risk management services. (http://en.wikipedia.org/wiki/Access_to_finance) How to Access Finance by Fayo Williams
  4. 4. What are the criteria for Business Growth? 1. 2. 3. 4. 5. 6. 7. 8. Increase in Sales? Increase in Profitability? Increase in Assets? Increase in visibility? Establishment of structure? More branches? More staff? Increase in production capacity/service excellence? Increased capacity for R & D/ New product development? How to Access Finance by Fayo Williams 4
  5. 5. •Access to affordable finance is a general problem facing MSMEs globally; •Problem is more pronounced with small business owners in Nigeria (42.1% Micro, 13.57% - Small & Medium owned by Women. 2010 National MSME Collaborative Survey - NMCS ) •84.6% MSME owners start-up capital is from personal savings (2010 NMCS); •9.2% accessed loans (2010 NMCS) •About 42% of women indicated finance as a major growth constraint (Enterprise Baseline Survey 2012 - EBS) •Collateral is the biggest constraint to accessing loans (EBS 2012) How to Access Finance by Fayo Williams 5
  6. 6. 6  Have you tried the three major ways of increasing revenue?  Have you thought of diversifying eg. by offering a service alongside your product?  VVIP – Have you blocked avenues of leakage e.g petty cash? Ensure you have sound plans on how to repay the facility!!! How to Access Finance by Fayo Williams
  7. 7. Have you leveraged on technology? Contact : g-businessng@google.com How to Access Finance by Fayo Williams 7
  8. 8.  Financing is the use and manipulation of money.  Raising money is one aspect of financing.  If you don’t have enough money to fund your business, another option is the use of other people’s money (OPM).  There are two ways to raise OPM. Each affects a business differently.  Debt: The business borrows money and pays it back over a set period of time at a set rate of interest.  Equity: The business gives up a percentage of ownership for money. How to Access Finance by Fayo Williams 8
  9. 9. • Scalable business (business with opportunities for growth) • Novel (new) or not run-off the-mill business (new and/or unique businesses) • Opportunity for financial return • Good management, focus • Realistic business concept and plan • Technical superiority • Low risk • Control How to Access Finance by Fayo Williams 9
  10. 10. Where is the money to grow our businesses? • • • • • • Governmental Financial Institutions and Development Funds Govt – sponsored Funds for Women Other Commercial Banks Microfinance Banks Venture Capitalists/ Financiers Partners and Customers • Equipment leasing • Grants-public eg. YouWIN! and private (social/non-profit) ** Non – cash Support How to Access Finance by Fayo Williams 10
  11. 11. CBN to inaugurate N200bn MSME fund Thursday http://www.punchng.com/business/money/cbn-toinaugurate-n200bn-msme-fund-thursday/ August 13, 2013 by Ifeanyi Onuba Abuja How to Access Finance by Fayo Williams 11
  12. 12. • Agricultural Credit Guarantee Scheme Fund (ACGSF) • N200 Billion Commercial Agriculture Credit Scheme (CACS) • N200 Billion Small and Medium Enterprises Credit Guarantee Scheme (SMECGS) • N200 Billion Restructuring and Refinancing Facility (RRF) • Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) www.cenbank.org/devfin/ How to Access Finance by Fayo Williams 12
  13. 13. • Have a clear business plan • Provide up-to-date records on the business operation • Have no non-performing or delinquent loans with any financial institution • Be a member of the Organized Private Sector Bodies/Associations such as LCCI, the Manufacturers Association of Nigeria (MAN), State Chapters of NASME, NASSI etc. How to Access Finance by Fayo Williams 13
  14. 14. To access the guidelines, paste the name of the scheme into your browser window eg. Agricultural Credit Guarantee Scheme Fund How to Access Finance by Fayo Williams 14
  15. 15. • Rural Women Enterprise Development Programme (RUWEDEP) • Cluster Development Program (Lagos, Calabar, Agbaku-Eji, Aba, Abakaliki, Alo-Borno, Kaduna, Osun, etc) • General Entrepreneurship Development Programme (GEDP) • Women Entrepreneurship Development Programme (WEDP) • Implementation of the National Policy on MSMEs • Specialized Entrepreneurship Training Programmes • National MSMEs On-line registration • Small business opportunities fairs www.smedan.gov.ng How to Access Finance by Fayo Williams 15
  16. 16. SMEDAN CONTACTS IN STATES 16  SMEDAN, Lagos Zonal Office 107, Ogunlana drive, Surulere, Lagos  Contact person: (Gbenga 080 3670 6209),  How to Access Finance by Fayo Williams
  17. 17. Grants: https://www.youwin.org.ng/ How to Access Finance by Fayo Williams 17
  18. 18. A YouWIN! Winner Mrs. Susan Uko - Abasi How to Access Finance by Fayo Williams 18
  19. 19. My experience with accessing finance to grow my business How to Access Finance by Fayo Williams 19
  20. 20. Further Resources: Access to Finance Headaches of SMEs: Imagined or Real? Article on www. http://nigeria.smetoolkit.org/ You can also visit my Blog: www.awesomebiztips.com How to Access Finance by Fayo Williams 20
  21. 21. Summary and Conclusion 21  Funds are available, from overdrafts to vehicles leases, non – collateralized loans and advances. However, SMEs deserve a better deal in terms of the interest rates, delay or lack of specificity in date of release and steep requirements.  When this is achieved, our nation will witness the much desired economic leap How to Access Finance by Fayo Williams
  22. 22. ‘Fayo Williams 08034030366 (sms preferred) How to Access Finance by Fayo Williams 22

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