You have struck the gold, you have the idea that would change the world, you have the solution to the problem, you have the insight and you have put it together in a way no one else has done before, you have the gut feeling that this is it and you can’t wait to show the world what you possess, but there is a problem, you don’t have the money to implement.
The scenery described above is just one example of how lack of finance hinders the growth of entrepreneurial activities, most entrepreneurs have little or no finance to either implement an idea or to expand a running business, and access to funds is little or non-existence. In fact, according to a study conducted by Global Entrepreneurship Monitor, the formal financial sector in Nigeria provides only 7% of funding to run a business, with over 80% coming from either the entrepreneur’s personal or family savings only. This is because the cost and expense of collecting a loan from commercial banks is sky-high, prospects are usually required to present collateral which is non-existence and the interest rates are hostile.
One would agree that funding isn’t the only factor hindering the growth of entrepreneurs in Nigeria; however, it remains a pertinent issue affecting entrepreneurs, which is why we have put together a list of socio-economic initiatives that provide funding to entrepreneurs through grants and affordable loans.
1) The Tony Elumelu Foundation Entrepreneurship Programme: The Tony Elumelu Foundation Entrepreneurship Programme is an initiative under the Tony Elumelu Foundation. Launched in 2015, it is committed to empowering 10,000 African entrepreneurs by 2025 with $100 million worth of investments in monetary terms. Every year, 1,000 African start-ups are selected for a 12-week mentoring and training programme, subsequently, each start-up receives a seed capital of $5,000 at the TEF Forum, a gathering of all beneficiaries. The grant is intended to grow and scale the business so it is equipped for an additional investment of $5,000 which is meant to be refunded. The foundation was established by the illustrious entrepreneur and the originator of the Afri-Capitalism concept which beliefs that a vibrant African-led private sector is the key to unlocking Africa’s economic and social potential.
2) Lagos State Employment Trust Funds: The initiative was established in 2016 to provide financial support to residents of Lagos State. By 2019, it seeks to have invested N25 billion in empowering micro, small and medium enterprises (MSMEs) and in boosting job creation in the state. It endeavors to achieve this by granting loans to entrepreneurs resident in Lagos state at a 5 percent interest rate per annum without provision of collateral. The initiative which sets sight on supporting 100,000 Micro Small and Medium Business Enterprises by 2019 has impacted 7,917 businesses since 2016.
3) I had rather be self-made: Linda Ikeji, influential Nigerian blogger seeks to empower young women from 18 to 26 years old into becoming independent business owners by supporting them through mentoring, publicity and finance. Every year, she disburses N10million naira to 10 female entrepreneurs towards scaling their businesses. Since its inception in 2015, I had rather be self-made has invested over N15 million in over 30 businesses across Nigeria.
4) Graduate Entrepreneurship Fund By Bank of Industry: The BoI offers a 0% interest rate loan to youths under the NYSC program. The funding program is set to target the establishment and/or expansion of an estimated 1,000 enterprises promoted by NYSC members across the country and the highest money that can be disbursed to an individual is N2million.
Besides the Graduate Entrepreneurship program, the development finance bank offers an average of 9% interest rates on loans. This is practical when compared to the average lending interest rate of commercial banks as at August 2017 which is 19.6%.
5) liveWIRE Nigeria programme: liveWIRENigeria programme is a programme supported by Shell Petroleum Development Company of Nigeria(SPDC). It aims to improve opportunities for young people to realise their potential through the creation and development of their own businesses. It is only eligible for people aged 18-35 and lives within Edo, Delta, Bayelsa, Rivers, Abia, Imo, and Akwa-Ibom. In 2017, Shell LiveWIRE Nigeria Programme awarded N40m in funding to 100 young entrepreneurs who have successfully completed the 2016 Enterprise Development Programme. Each received to enable them start-up and grow their own businesses.
6) Building Entrepreneurs Today: The Building Entrepreneurs Today (BET) is a programme designed to support budding entrepreneurs. Every year, 50 entrepreneurs are selected to undergo a six (6) months intensive entrepreneurial/business training. At the end of the training period, the Top five (5) Entrepreneurs are awarded financial grants as seed capital for taking their business to the next level. Till date, the program has supported 150 businesses and awarded grants to 20 entrepreneurs.
Links to initiatives website available here
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