Despite Nigerian entrepreneurs raising billions of dollars in 2021, quite a number of them with innovative ideas were still unable to access the finance needed to kick start or scale their businesses.
Finance is the fuel that propels every business, and in its absence, start-ups with wonderful ideas risk failure or stagnation.
Pre-seed and seed capital for kick-starting and expansion are becoming increasingly challenging for start-ups and entrepreneurs to locate, especially in Nigeria.
Understanding the critical importance of funding to the Nigerian entrepreneurship ecosystem, Start-Up Digest has dug up some places where they can access funds for their businesses in 2022.
General criteria
The general criterion for accessing these funds is to have a business. These firms rarely fund ideas because ideas are untested and untried. You must have a business and ensure that it is providing a solution to a problem in society.
Next is to have a bankable and viable business plan. More so, the start-up should be clear on where he/she wants to be in the near future and be able to describe the market he/she plays. And the entrepreneurs should have good bookkeeping to accurately know their revenue and the expenditure
Tony Elumelu Foundation Fund
The Tony Elumelu Foundation (TEF), Africa’s leading philanthropy has empowered 200,000 entrepreneurs across 54 African countries with seed funds of $5,000 each.
Tony Elumelu Foundation has empowered 9,631 entrepreneurs from across 54 countries of Africa with seed funds of mostly $5,000 each.
A few years ago, Elumelu set aside $100 million for African entrepreneurs. If you are in agriculture, fashion and design, light manufacturing, ICT, and solid minerals, among others, then you may apply for the ongoing Tony Elumelu Fund. You can be one of the 1,000 lucky entrepreneurs to be shortlisted for 2022 as the application is currently ongoing to close on March 1, 2022.
Jack Ma Africa’s Business Heroes
Africa’s Business Heroes (ABH) is the Jack Ma Foundation’s flagship philanthropic program in Africa to support entrepreneurs. Our mission is to showcase and grow local talent who are creating a positive impact in their communities and beyond, and inspire a movement of African entrepreneurship.
The program is open to entrepreneurs from all 54 African countries and will see the top 10 finalists share the $1.5 million grant money yearly.
It is a 10-year programme that will recognize 100 African entrepreneurs and provide grant funding, training programs, and broader support for the broad African entrepreneurial ecosystem.
It funds an enormous diversity of business with sixteen different sectors including agriculture, beauty & wellness, construction, consulting, education, energy, environmental protection, financial services, F&B, healthcare, ICT, logistics, manufacturing, media & entertainment, retail, and transportation.
So, are you operating in any of those sectors, and then you may apply for Jack Ma Africa’s Business Heroes Programme. The application opens in April and closes in June yearly.
Lagos State Employment Trust Fund
The Lagos State Employment Trust Fund (LSETF) has a capital base of about N11.1 billion and has disbursed loans worth N8 billion to no fewer than 12,000 micro, small and medium scale enterprises.
Its fund is divided into three categories: micro and small businesses. Under the micro, businesses can access up to N500, 000 loans with an interest rate of five percent and a tenor of one year. For the small business category, businesses can get up to N5 million with a tenor of three years.
There are other specific criteria apart from the general ones listed above for accessing the LSETF funds. It includes membership of a business organisation, which will recommend the business for the loan; Lagos State tax receipt for at least six months, and Lagos state residency card. This takes three weeks for processing.
The loan cycle is open all through the year. You simply visit the website or their office at the Lagos state secretariat to apply with relevant documents.
Incubator and Accelerator hubs
A start-up incubator is a company, university, or other organization that ponies up resources – laboratories, office space, consulting, cash, and marketing–in exchange for equity in young companies when they are most vulnerable.
While an accelerator scales the growth of an existing company. Accelerators focus on scaling a business while incubators are often more focused on innovation
Today in Nigeria, there are several accelerator and incubator hubs across the country that do not just help in scaling the business through training but also provide funding to accelerate the growth or innovation. There are also many international companies that support entrepreneurs. You can apply by searching them online and filling out their application forms.
Read also: ‘Binance will be funding African projects, training developers, craving blockchain adoption’
Angel investors
For those looking for N10million to over N100 million, angel networks can come in handy. Networking is critical here, and you need to find angels who understand your industry and share your passion.
To get started, go to www.AngelSoft.net and look up the group nearest you.
Partnerships
A more established company may have a strategic interest in helping to develop your product and be willing to advance funding to make it happen. Several companies develop customized social networks for large enterprises, with the expectation of using that funding and experience to compete in the consumer market someday.
Licensing may not be as sexy as being a consumer brand, but it will cost you a lot less.
You should always look out for larger organisations to partner with by sending them proposals on areas of possible collaborations. These large corporations will finance those areas to scale their operations.
