A non-governmental organisation, Advocacy for Anti-Bribery, Corruption and Crime Prevention, held an enlightenment programme on different ways of sourcing funds for small and medium-size entrepreneurs (SMEs) and finance management for vulnerable women and people living with disabilities (PWD) in Mushin Local Government Area of Lagos State.
The lecture was organised by the organization under the Agent for Citizen-Driven Transformation (ACT) programme, in partnership with the British Council.
In his welcome address, the executive director of the organisation, Immam Moruf Okusanya, noted that government could not employ everyone and, since in Mushin area of Lagos, women engage more in SMEs, it became expedient to enlighten them on the challenges of sourcing funds to grow their businesses, which would invariably alleviate poverty among them. He advised participants to adhere to the teachings of the facilitators.
Delivering his lecture, Mr. Ganiyu Jamiu, a chartered accountant, identified different ways to source funds. They include funding from personal savings, funds from friends and family, trade credit, interest-free loans and angel investors.
Explaining further, Jamiu said that funding from personal savings was the most common type of funding for small businesses. He also stated that funds from friends and family was another great source because they generally trusted you and it was easier to convince them.
“It is easier and flexible, with low interest rate or interest-free, unlike banks,” he remarked.
He advised that they should use the right approach, and that they also approach the right person: “Sit down and get the details of the loan. Agree on the loan repayment terms. Offer to them a reasonable level of interest, don’t over commit yourself. Control your desperation. Make every effort to consistently repay on time. Discipline yourself. Keep the line of communication open.”
He, however, warned that there was risk of losing their money, which might have adverse effects on their relationship. Another option he mentioned was the angel investor.
According to Jamiu, these are business owners, executives and/or other successful individuals that have the means and ability to fund deals that are presented to them that they find interesting.
“Networking is a great way to fund an angel investor for business,” he added.
Trade credit, Jamiu said, is another easy way to get loans, but it usually comes with arrangements to pay on scheduled and agreed dates: “It is simple, but ensure you fulfil the agreement. Be honest. It gives you goodwill. It is a continuous source of financing. The source is easily accessible and available as long as you maintain the good relationship. It does not require any formal negotiation.”
Jamiu also mentioned profit plough back as another source of raising funds for the purpose of expanding business, especially when there is depression such as during the COVID-19 pandemic.
“You can do your business without relying on anyone,” he said.
Bank overdraft is also another source of raising funds, Jamiu added.
Similarly, Mr. Adedeji Fatai, who spoke on finance management, advised participants on the importance of keeping proper records of their finances. According to him, that is the only way to monitor the growth of their businesses.
He mentioned three core areas in finance management, paying yourself salary, planning ahead, paying debt timely and managing returns on investment.
Some of the participants expressed satisfaction with the lecture, and gave thanks to the organisers for thinking it worthwhile to speak to them on an important issue as this.