To deal with issues of poor funding affecting existing and aspiring entrepreneurs in Nigeria, Jiji Africa has identified three new ways startups can raise funds.
Speaking during an interview with journalists, Yuliy Shenfeld, the director of Operations at Jiji Africa, gave insight on three legitimate ways to raise funds to start a business in order to cushion the effect of the prevailing economic downturn on businesses.
The 2022 Nigeria MSME report titled ‘Fuel for Africa’s Next Billion Businesses,’ said 80 percent of businesses under the Micro, Small, and Medium Enterprises (MSME) in Africa fail within the first five years of their existence due to lack of finance.
According to World Bank, small and medium-sized enterprises mostly rely on internal finances or cash from friends and family to begin.
It attributed the development to the inability of businesses to secure bank loans, compared to large companies.
In a recent report, the International Finance Corporation (IFC) estimated that 65 million businesses, or 40 percent of MSMEs in developing countries, have an annual unmet financing need of $5.2 trillion, translating to 1.4 times the amount of global MSME lending at present.
Meanwhile, Shenfeld said there is still room for young entrepreneurs, who are zealous to run personal businesses successfully.
He said startups could sell unwanted items, offer services, or apply for grants to generate funds as seed capital for new businesses or to grow an existing business. Here are three ways that startups can raise funds:
Apply for grants
Shenfeld said startups should look out for grants to apply for especially grants that are suitable for their businesses and it could be government, private sector, or NGO grants.
He urged prospective startups to search for opportunities provided by government, private sector, NGOs, and international grants.
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“Ensure you meet relevant eligibility criteria before starting your application process. Prepare your grant proposal, and submit it on time, through the appropriate channels. Follow up on your application with grant providers to ensure they received your submission,” he said.
Explore freelance work
Statistics have shown that over 1.5 billion people in the global workforce are freelancers.
According to Shenfeld, people with skills or talent, such as writing, graphic design, or programming, can offer freelancing services to raise funds.
He said there are many websites and platforms like Upwork and Freelancer.com that connect freelancers with clients looking for their services globally.
“Create a portfolio that showcases your skills on your preferred platform and set rates based on skills, experience, and market rates for such services. Promote those services on social media, and start small by taking up low-risk projects,” he explained.
Sell unused items
He advised startups to gather unused, used, or preloved items that can be sold online through websites like Jiji. ng to generate extra business funds.
