This document provides an overview of business financing opportunities in Nigeria. It discusses that most entrepreneurs feel optimistic about their businesses but also need financing. It highlights the importance of having a clear strategy, scalable business case, and financial clarity when seeking investment. The document outlines different types of investors, investments, and funding options depending on the business stage - including family/friends, grants, government funds, non-bank lenders, private equity, venture capital, and crowdfunding. It provides some examples of organizations that provide financing and support to businesses in Nigeria.

2. UNLOCKING
BUSINESS
FINANCING
OPPORTUNITIES
MAY 2021
(C) Sahel Capital Agribusiness Managers Limited.
Confidential.
Not for further reproduction or distribution.

3. WHAT DO WE KNOW?
Most entrepreneurs are
very optimistic about
their businesses.
Most entrepreneurs
feel they need
financing.
Most businesses
require clear strategy
and rigorous business
planning.

4. 1
Nuggets to consider as you
think about business financing

5. WHAT IS YOUR
BUSINESS CASE?
Are you selling investors the
narrative of HIGH SOCIAL IMPACT
or HIGH POTENTIAL MARGINS

6. It is crucial that a
business is able to
achieve scale and
exploit an opportunity in
the market. This makes
for a good business
case for an investment.
HOW SCALABLE IS THIS CASE?
Scalability

7. HOW MUCH DO YOU NEED?
WHEN? AND FOR WHAT USE?
Financial Clarity
Investors wants to see how exactly their
investments is meant to impact the business.
It is important to be clear on the specific
business needs an investment is to address.

8. INVESTOR TYPE
Some investors are
INDUSTRY or BUSINESS
CASE specific.
Understand your business
and focus your search.

9. INVESTMENT TYPE
It is crucial to understand the
differences between both options and
the implications on your business.
Understanding the current status of
your business and choosing the right
kind of funding.
Debt vs Equity

10. What have you done so far with what you have?
Traction
Investors want to see that your product or
service has started that “hockey- stick”
adoption rate, which implies :-
• A large market
• A valid business model and,
• Sustainable growth.
Status/Track

11. What is that in
your hand?
How can you improve your current cashflows:
• Increase Revenue
• Reduce Cost

12. Regulatory Compliance
Compliance is an important issue for
investors and failure to adhere to
regulations could result in stiff
penalties.
Red Flags for Investors

13. 2
Funding Options

14. Business Cycle
Type of funding requirement depends on the business lifecycle
Profit
Time
Explore
(concept)
Validate
(pre-seed)
Build
(seed/startup)
Launch
(early stage)
Growth Maturity
• Lean Cost
• Self Funding
• Bootstrapping
• Self Funding
• Bootstrapping
• Family/Friends
• Govt. Grants
• Crowd Funds
• Angel Funds
• Seed VC’s
• Crowd Funds
• Angel Funds
• Seed VC’s
• VC Rounds
• Bank Funds
• IPO Investors

15. Information mining
and sourcing
Gathering information on funding
options peculiar to your business is key.

16. Types of Funding Available for Businesses
Sources
of Funds
Non-conventional
sources
Family, Friends &
Fools Funding
Grants &
Challenge Funds
Government Enhanced
Intervention Funds
Non Bank Financial
Institutions
Private Equity
Venture Capital
(Excludes commercial/bank loans)

17. Family Friends
and Fools

18. The Africa Enterprise Challenge Fund (AECF) is a US$ 256 million private sector
challenge fund that provides catalytic funding to enterprises in Sub-Saharan
Africa. The fund also supports innovative commercial businesses in the
agribusiness sector. AECF runs challenge windows at different times in the year
along different themes which businesses can benefit from. Some companies
that have benefited from AECF in Nigeria include: AACE Foods and DADTCO
(cassava processing).
Availability of grants and challenge
funds for businesses in Nigeria
There are several Africa focused challenge
funds that aim to support innovative
commercial businesses in certain sectors
with the aim of reducing rural poverty,
promoting resilient rural communities and
creating jobs through private sector
development.
Africa Focused
Challenge Funds

19. Availability of Federal Government intervention
funds for businesses in Nigeria
Bank of
Industry/Bank of
Agriculture Loans
These banks provide a number of Federal Government sponsored
loans to SMEs across different sectors and value chains. The loans
offer single digit interest rates. The BOI YES programme is one of such
platforms for obtaining single digit debt financing.
CBN MSME
Development
Fund
The MSME Development Fund launched by the CBN is targeted at
SMEs and micro-enterprises. Eligible activities to be financed include
agricultural value chain, services etc. Loans are to be disbursed by
microfinance banks at single digit interest rates.
Anchor
Borrowers
Programme
Although targeted at large commercial enterprises in the agriculture
sector, the anchor borrowers programme allows agribusinesses and
small farmers who are involved in primary production and who make
up the value chain of companies in the agriculture to benefit from
single-digit debt financing.

20. Support of Non-bank financial institutions
Non-Bank financial institutions are able to provide short-mid term debt
financing for SMEs with good credit standing. To successfully receive funding
from these institutions you will need a business plan and comprehensive
financial records. Examples of companies in the space include GroFin.
Grofin provides financing and loans for SMEs in Africa,
especially those with a track record of success and a
need for financing to pursue expansion opportunities.
• Application
• Review of Application and Approval
• Funds Disbursement
• Ongoing support and Monitoring
Their application process encompasses
the following steps:

21. Availability of non-conventional
sources of funding for businesses
Crowd Funding
Crowdfunding is the practice of funding a project or
venture by raising monetary contributions from a large
number of people. There are certain platforms in
Nigeria that businesses can leverage on to get
crowdfunding from sponsors.

22. • Sahel Capital is fund manager for Fund for Agricultural Finance in Nigeria (“FAFIN” or the “Fund”), an
agribusiness focused SME private equity fund.
• FAFIN uses blended finance to fund SMEs in Nigeria, generating commercial returns and achieving social
impact in the process.
PE & VC Firms Fund Businesses in Nigeria
Typically target mature businesses
The Fund also has a separate funded technical assistance facility from donors, with which to provide capacity building and
technical support services to investee companies.

23. www.sahelcp.com
@Olumide.lawson