Funding 101 for Nigerian Entrepreneurs: Loans, Grants & More

Hello and welcome to the show. Before we begin, the usual warnings, expect some noise in the background, but hopefully nothing out of the ordinary. Now today we're going to continue on the question that we started yesterday. I decided to split the episode into two just so that we don't have, you know, one hour recording. I'm trying to stay away from those 3045 minute recordings. So today we're going to look at the second-half.

We had started the conversation about what folks should do, Nigerians anyway who want to start a business but who think that access to finance is a problem. So yesterday we tackled tackled the first half of the question and then today we're going to tackle the second-half. So today we're going to be looking at the kind of governmental and not-for-profit support that is available to these individuals, these Nigerians who want to start a business and they think access to finance is a problem.

Yesterday we had gone over how I think yesterday we looked at crowdfunding, What else? Crowdfunding being bootstrapped, you know, things like that. So yesterday we had looked at private initiatives that were available to people to solve this problem. And so today we're going to look at the government and the non government support that is available. OK, so let's head straight into it. Now. The Nigerian state, sometimes I

think they'd like to pay lip service to the idea that SM ES are important for economic growth and job creation. Now, most states would recognize that, you know, the American state, the United Kingdom, because in both places, I think even in Australia, you know, they recognize that the private sector or the SM ES, you know, people who are responsible for, you know, close to 60 in some places, more than 60% of economic activity.

So yes, once in a while you hear Nigerian politicians, government officials who quote those kind of statistics. But sometimes I get the impression that it's just lip service. The only thing is that the Nigerian government seems to pay attention to actually is there, what will I say there? Remuneration, you know, their salaries, the Ester code, you know, stuff like that. But once in a while, they do sing the popular thing.

Now, those of us who are involved in SM ES are important for economic growth and we are important for job creation. But whether the Nigerian State Act adequately reflects that or not, I want you guys to know those of you listening to the show right now, that we actually are the backbone of the economy and we are important for Nigeria's growth, for job creation, for economic development. So yes, the people that also rock, they are important for setting the macroeconomic conditions that make the country harm.

But then those of us, the simple folks, maybe even the SOF, yeah, even the sophisticated folks, you know, So those of you with your fintech ideas, those of you who are trying to sell catfish, you wedding photographers, you tailors, engineers, accountants, whatever, private sector people, SM ES, we are the ones that are actually responsible for keeping these things going. Anyway, so that's enough of my rant when it comes to being dissatisfied with the Nigerian state.

Let's see. So now let's go straight into what options are available. So I'd like to break this down into some rough headings. We're going to look at some loan programs that are available for folks. Or by the way, when we say loan, for those of you who are newbies in this space, when you hear loan, it means that you give somebody money, sorry, somebody gives you money and in return you give them the money back plus something on top interest.

So that is a loan. Traditionally, we distinguish loans from equity, which is when someone gives you money and in return they want a share in your business. So let me look at my list. I don't think I have any equity things here. No, I don't think we have any equity things here for discussion. So we're going to look at loan programs. We're going to look at business development support, because there are some government organizations that are there primarily to help you with training and advisory, even though they're not going to give you much money.

But I think those are also things that we can take advantage of when we want to grow our businesses. Then there's also nonprofit support, also people who are not governmental agencies, you know, private businesses, private companies who are also interested, interested in in what's that word fostering or building, building the entrepreneurial space. You know, folks like Tony Alumelu and his idea of AFRI capitalism or is it Afro capitalism or something like that.

Then also going to look at, let's see what else, grants and competitions and let me look at my list. Let's see. I think that's, that's just it basically. So let's dive straight in. So they are loan programs that are available. There's the Bo, I, I think I mentioned that yesterday, that is the Bank of Industry. Let's say there's also the Nursal Microfinance Bank that is NIRSAL Nursal or Nissal or any, I don't know how it's pronounced a microfinance bank.

Now the National Microfinance Bank, a bunch of you are not. Maybe you've heard the term, but you don't know exactly what it is. Yes, it's one of those obscure ones, but when you start making the rounds for, you know, attending government programs around these sorts of things, you hear their name bandied around here and there. Now what Nestle is, it's actually is a channel for the CBN, that's the Central Bank of Nigeria and they provide loans to agro businesses, you know,

people in the agriculture space. So that's the reason why a bunch of you might have heard of Sweden and BOY and Afrixim and all the other ones, but you don't hear of Nersau and that's because they are, they primarily cater to people in the agro space. And of course, I came across Nersau when my brother and I were running the family agro export business. Now Nassau, the acronym is one of those long ones and I always have to write it down to remember.

So let me see where I was in. OK, Yes, it's the Nigerian incentive based risk sharing system for agricultural lending. So again, it's the Nigerian incentive based risk sharing system for agricultural lending. So if you're in the agricultural space, you want to get some more information on that, just Google NERSAL again, it's NIRSAL. Then the government backed SME loan programs that change from administration to administration.

So there's no point me doing any research to find out what's available in the current government administration. Because if you're listening to this podcast a year from it's recording and there's a new government in place or two or three years and there's a new government in place, there's going to be a new set of SME loan programs that are supposed to support people in the entrepreneurial space. So it changes from from government, I mean, to government, I mean, and it's one of my it's one of the things I

really, you know, nags at me that, you know, like we're losing a lot of money and we're being wasteful in these sorts of things. Because there's certain sense that, you know, one government comes and they front load a whole bunch of these programs and they finance it. And then another government comes and scraps it and then does something else. And they're just these larger questions of accountability. You know, so last year or with the last administration, you know, you drop hundreds of millions of dollars and stuff like that and you government comes to scraps it and then starts bringing out his own thing.

And really, are we trying to track how much money did we give the last time? Yeah, Accountability wasn't used for the right purposes. Is this money going to be paid back for people who took the money and embezzled it? Is anybody going to go to jail? So it would be nice if there was some continuity on these sorts of things. You know, it's just a pity that, you know, good luck comes in. He institutes something, he leaves, and then Buhari comes in and scraps that and then brings his own.

And then he leaves and then Tin, who comes in and it's the same party, but then he scraps all the stuff that Bohari did, and then he does his own thing. So that, Paul, what's it called? Policy inconsistency. It's a problem. So we need to work on those sorts of things. Now let's see, what else? Oh, yeah. So those are the sorts of loan programs that are available. So BOI and nursal, you know, those ones will run all the time regardless of whoever is in power.

So you can research and feel confident about that, but then use Google Gemini, what else? Bing, you know, research and find out what other SME loan programs are available currently. Whenever you're listening to this podcast and give it a shot. You never know, you might qualify. Then there's there's some organizations that just give business development support like I mentioned and Smeden is one of them. So Sweden primarily, they do business development support,

they're there to make sure that you get training, get advisory support. Then they do offer SME grants. The idea behind the grant is a rough definition anyway, so don't take me to task on it. So the idea behind the ground basically is you get money and it doesn't have any repayment obligations. So it doesn't have any repayment obligations, but it might have some other obligations attached to it. So because you had on this podcast that SMEDAN gives grants, that's the small and medium scale Enterprise Development Authority of Nigeria.

I think I really should check to be sure. I'm not giving you guys the wrong acronym, but just Google SMEDAN. Then again, it's only available for Nigerians. I hope you guys realize that this is a Nigerian context. So for those of you Americans, UK people, people listening in from Cameroon, you know this doesn't apply to you, but I'm sure that you guys are going to have some local alternative. So like I was saying, because you heard here, that's me, then gives grants.

Don't just assume that you can go and get money from them and it's obligation free. So grants might not come with a repayment obligation, but it does come with some restrictions and some obligations. Do the research accordingly to be sure that you're OK to live with those restrictions. Then let's look at people in the not-for-profit space, OK, let's start from the small level. They are incubation and mentorship opportunities that are available.

And that's because it's become part of the culture, a good part of the culture in the last 10-15, maybe 20 years. And we now have business incubation centres, Co working spaces, all these sorts of things coming up in urban areas. So Abuja, Lagos, you know, most definitely I did some work with one based out of the East. I think those Africa, I can't remember what it was called, but one based out in the East and we did that one online.

And these are good sources of business development support. Incubation. Incubation is the idea behind incubation is, you know, you go to a place that people with business expertise and access to funding, things like that and they put you through theory. This is how you should be setting up your business, putting out your offers, you know, those sort of things. And then maybe some access to finance as well. But the chief benefit whether you get money or not is this whole thing about incubation,

getting business development support, the advisory services that you get, also the mentorship that is available with these organizations. And then plus a bunch of them especially in Abuja and Lagos, these incubation spaces are also Co working spaces as well. So they come with tremendous networking opportunities. So yeah, I think it's something that folks should give a go as well. If you think you're strapped for cash, they're not too expensive.

As of the time of this recording, I think the last one I went to, well, I didn't have to pay anyway because I went there to discuss business with them, see how we could do some business together. If I remember correctly, I think was I think 2005 for the whole day, that's 2500 there for the whole day. That's 8:00 AM to 6:00 in the evening. I know that's a bit of a stretch if you're going to go five days a week. So that's two 5 * 5 that is 551012.

That's 12,005. OK, OK. If you look at it that way, if you're going everyday, it's it's a bit of a stretch, but it might not be a bad idea to go when they have open house programs available to the public and only you catch the drift. These are not bad places to spend your time around, definitely better than staying at home, looking at the ceiling and feeling depressed because you don't have any money. So those are some of the opportunities that are available when it comes to nonprofit support.

Then let's see. Oh, yes, I mentioned Tony Ilumelu at the start of the episode, and that's where we look at grants and competitions. Now. Tony Ilumelu, certified big boy in Nigeria. He has the Tony Ilumelu Foundation and that's the philanthropic arm of his businesses and he has a thing for empowering African entrepreneurship. I can't remember if he calls it Afro capitalism or Afro capitalism, but if you just Google Tony Illumelu Foundation,

Illumelu's L sorry ELUMELU, or if you Google TEF all caps it, it should come up. That's a popular abbreviation for his activities. Then the philanthropic space. So just Google TEF, Tony Illuminati Foundation and then it should come up. So they also offer business advisory training, things like that. And then there's this, I'm not sure if it's annual or biannual, you know, that's yearly or every two years, every three years.

So they have this thing where there's a competition. OK, let me let me not feed you guys false information anyway. But I know that there's some sort of competition and people that issued grants. And now remember that as a general rule, grants do not come with repayment obligations, but they do come with other restrictions and obligations. So do your research accordingly to be sure that you're cool with what the restrictions are going to be with the other conditions before you apply.

So apart from Tony Ilumelu Foundation, there's also the Faith Foundation. For those of you who've been listening to the podcast for a while, you know that I've been doing some work with them, providing mentoring services. Currently they are in partnership. They have this partnership that they're running with the OCIF that's the orange corners international. No, sorry. You know what, let me not give you guys bad info. Just if you just Google Faith Foundation and you also Google OCIF, you know, it'll, it'll come up.

Well, the OOCIF, the orange corners, something something the I think they're part of the royal family of is it Netherlands? I'll be Denmark or anyway, let me stop before I give you guys bad info, but just Google Faith Foundation, Google OCIF and they will come up. So they have this partnership right now where the OCIF is providing funding and the Faith Foundation is the administering party party here in Nigeria and they're running Nigerian entrepreneurs through a bunch of stuff.

So they run you through business incubation programs. There's a competition at the end of the whole thing and people get a chance to earn, to win some good dollars at the end of the day. I'm not sure if it's a loan or if it's a grant, but do your research and you see that those things are available. I currently have, I'm currently providing mentorship to one of the candidates who is a part of the program. He is in the gaming space,

really interesting, you know, not just people who are doing stuff in fintech and Web 3, but then people in the gaming space, lots of interesting ideas that we have over here in Nigeria. And before that I had mentored one other person who was who her business, how would I describe it? She makes interesting products out of bean cakes and I think I should hook up with her again so I can see how I can use her as a feature on the episode.

Because it's really interesting the different business ideas that people are pursuing in Niger and it'll be nice to expose as many of those ideas as possible so that you guys can see that stuff. Stuff is going on in this country. Yes, sometimes seems things seem gloomy, but the stuff that is going on, people have bright and really interesting ideas. So that's another option that's available. Fate, foundation fate is FATE

not you know, we Nigerian people, you know, now you see FAITH and the average Nigerian says fate, you know, not faith. But anyway, so this is Fate Foundation, FATE and so Google Fate Foundation, Google OCFOCIF and you will see all the opportunities that are available there. Then there's also LEAP Africa, that is LEAP Africa. They offer training, they offer mentorship, they offer networking. I am not sure about any grants available here.

LEAP is the Leadership effectiveness, Accountability and Professionalism Africa. So yeah, that's them. Training, mentorship, networking, all those kind of support, and of course, they typically focus on the youth. When you say youth, I'm not sure what the age range is, but I remember being involved in two programs so far where youth was defined as 18 to 35, but I think that's particularly broad. So I'm not sure what the age range is for leap then.

OK, 20 minutes. So let me just bring this to the close summary. These are the sorts of things that are available. I hope you've had your pen and paper and you've been taking notes. I've been talking and whenever you find something that is really, really interesting, all you have to do is pick up your mobile phone and open Google, open Bing, open Gemini, open chat, DPT, and then start searching a way. You're going to be able to get more information beyond what I

provided here today, and you're also going to be able to get the next steps about what it is that you're supposed to do. But I can't stress, or rather I can't overemphasize the importance of networking when it comes to finding funding opportunities. This whole thing of hanging around people who are in the same space of what as you, trying to do the same sort of things that you do. There's this Grapevine effect, you know, so somebody hears about something and hears about this and hears about that, and that's how people hear about funding opportunities.

And in the past I've spoken about how one of my associates that I hang around was able to get business funding to the tune of I think was about 10/10/10 millionaire. I was maybe two or three years back. And that was something available for people in the, in the creative industry. And he was only able to hear about it. I was, I was only able to hear about it. I didn't take advantage of it at the time anyway because I figured 10 M, you know, it's too much.

I don't need 10 M in my businesses. But anyway, that's the topic for another day. But bottom line is these sorts of things are around, they're out there. The only way that you're going to hear about them is if you're part of the community and if you, you're part of, you know, that whole Grapevine effect. So hanging around people, networking, that's when you're going to be able to hear this is what's up or this current government is coming in and this is the program that they're putting out and this is how you apply.

And this is my connection and this is my this and that. That's how you hear of all those sorts of things. Now another thing that you folks need to pay attention to for those of you who are going to go through this whole. Government route or not-for-profit route, business plan absolutely important. Some of the ideas that we discussed yesterday, you know, angels, especially if you're looking at informal Angel networks. Like I said, if you're from Omar here and Omar here, you know,

is, is this is my guess. If you're from those sorts of communities and you know, you have big people there, you know, big bosses and Big Sisters there, you know, who are maybe big either in textile or imports or agriculture or whatever. In those sort of informal networks, your conversations can make you go far. But when we're talking about governmental organizations and not-for-profit organizations like the Tony Elumelu Foundation, for instance,

business plans, all the formal stuff absolutely necessary. You're going to have to put all that paperwork in place. It is necessary for raising formal business funding, whether you're talking to banks or VCs or microfinance banks or whatever. All that paperwork that some of you don't like, absolutely essential. The thing that you guys don't like, Well, the thing that I don't like forecasting, I don't like that section, but it's going to have to be there because people are going to want to know if I give you, you know,

500K naira or if I give you 10 M, you know, dollars, what are you going to use it for? How you going to spend it? How can we forecast cash flow concerns or profits, payback periods, blah, blah, blah, all those things that give people a nightmare. Absolutely important to working these things out. So summary, what I've been saying is if you think lack of funds is holding you back, then your options are simple bootstrap.

And that involves a lot of hard work because you have to chase down customers. You can't escape that or financing and then you're going to have to do a lot of hard work because you're chasing formal and informal, sorry, formal financing options, whether governmental options or non governmental options. But either way it involves hard work. So for bootstrapping, it's hard work. You're chasing customers. If you're doing the whole financing thing, it's hard work.

You're chasing people and you're chasing institutions that have money. So you can get a share of that money either way. Please pay attention either way. Hard work and creativity is part of solving the problem. So all you people who keep saying yes, but if you have that yes but attitude, then you're not ready. So you're either going to bootstrap or you're either going to do financing. If you keep saying yes, but yes, but yes, but you're not ready,

you will make progress. So if we're bootstrapping, we're bootstrapping. It's hard work. What's the work that is required? Let us begin. If we're doing financing, then it's hard work and hard work. Let's find out what the hard work is. For instance, the business plan thing. If the business plan is an obstacle, then there's no yes, but you have to do the business plan. How are we going to get this business plan? What should be in the business plan?

Can I do it on my own? What are the resources that are available for me to come up with a correct business plan so I can get this loan? So please, either way, there's going to be hard work involved, hard work and creativity. So all you, yes, but people, you're not ready. So that's it. So thanks for listening to the show. Connect with me on WhatsApp. The phone number is 08064662140. The country code is +234. For those of you who've been out of the country for a very long time and you can't remember the code for your motherland.

So that's how you reach out to me. For those of you who are not Nigerian, then you can connect with me on LinkedIn. My name is Tavishima Ayede, I'm the host of the show. You can find the correct spelling of my name and my e-mail address from the link. We're currently listening to this episode. Thank you very much for your time and attention. I'll catch you guys at the next episode.