January 25, 2018
February 2, 2018


Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.

Having a Bank account (or any other form of financial service) is usually a first step toward broader financial inclusion since it allows people to store money, and send and receive payments. A Bank account can also serve as a gateway to other financial services, which is why ensuring that people worldwide can have access to a transaction account is the focus of the World Bank Group’s Universal Financial Access 2020 initiative.

Financial access facilitates day-to-day living, and helps families and businesses plan for everything from long-term goals to unexpected emergencies. As Bank accountholders, people are more likely to use other financial services, such as credit and insurance, to start and expand businesses, invest in education or health, manage risk, and weather financial shocks, which can improve the overall quality of their lives.

The global pursuit of financial inclusion as a vehicle for economic development had a positive effect in Nigeria as the exclusion rate reduced from 53.0 % in 2008 to 46.3 % in 2010. Improved further to 39.7% in 2012.


Finding the money to start a small businesses is usually one of the first problems that entrepreneurs face. For most people(especially fresh graduates), this process can be hard and very frustrating. What makes this process frustrating is a combination of wrong expectations and looking for money in all the wrong places. The list below provides a guide for sources of small business financing.

Source #1: Your savings

Most entrepreneurs start their companies by investing their own savings. This source of financing can be ideal – if you can afford it. It puts you in full control of how much you are going to get. Furthermore, you never have to justify yourself to investors and you have the freedom to operate as you see best. There is a trade-off, though: this freedom usually comes at the expense of having little money.

Source #2:  Family and friends


One of the sources of business funds is family members and relatives. Borrowing from friends, parents, siblings, uncles, is significant and good if you come from a family where there are able and capable people to lend you. Sometimes they offer such moneys without asking for interests and you don’t have service the debt. In some families, they have meetings on how to collectively support one of their own. It is a common practice in Nigeria.

However, this method is probably one of the riskiest ways to finance a business, we recommend against it. The problem is that if things go wrong, your friend/family relationship is affected. And in any startup business, you are guaranteed that things will go wrong at one point or another.

Source #3: Customers and suppliers

Two great funding sources for small businesses are actually your customers and your suppliers. Customers can finance your business by prepaying for orders – or by giving you an advance. Obviously, you use these funds to handle their transaction. This funding is not easy to get, but customers may be willing to prepay if your service is unique enough or if they really need your products.

Another great source of financing is supplier credit. Basically, suppliers give your company 30 to 60 days to pay an invoice. Getting supplier credit is similar to getting interest-free financing for 30 to 60 days. It takes a little effort to get supplier credit, but it is definitely worthwhile.

Source #4: Crowdfunding

Crowdfunding is a new way of financing businesses that is often misunderstood. It can be used to finance only a specific type of business. Think of crowdfunding as a platform on which you can pre-sell your products to consumers. If enough customers pre-purchase your product, the transaction clears and you can move forward.

Crowdfunding is a great platform if you are selling an innovative product that could have mass appeal, such as Robots or Tech Gadgets. Two well-known crowdfunding platforms are Kickstarter and Indiegogo.

Source #5: Banks and Financial Institutions

Nigerian banks often give loans to individuals for many reasons but not without collaterals. Collaterals are property or something given to the bank in place of money borrowed so that the bank can sell off that thing and recover their money.

Also, Bank loans often attract interest. Bank loans come in many forms – long term, midterm and short term loans. What determines how loans can be classified is the length or period of time in which borrow is allowed before he or she repays the money and the amount of money involved.

Banks are major sources of business funds. Short term lasts about 3 years while medium term lasts between 5 to 10 years, but this condition varies from bank to bank.

Even though most commercial banks in Nigeria do not give loans without interests, Islamic Banks have changed that common practice. This is because they operate on the principle of Sharia Law which prohibits interests, riba or Usury.

To access bank loans you must have a current account with them. And  Bank can lend up N500,000 if the applicant has operated a current account for over 6months and it is done on corporate basis.

Source #6: Grants and External Funding Donors

There are several funds available to Nigerian Entrepreneurs at the moments. Some of the most popular include;

  1.  YouWIN Connect Nigeria –
  2.  Tony Elumelu Foundation (TEF) Entrepreneurship Program  –
  3.  Bank Of Industry (BOI) –
  4.  Diamond Bank BET Programme –
  5.  AYEEN Financial Grants –
  6.  GroFin Fund –
  7.  Lagos State Entrepreneurs Trust Fund (LSETF) –

Source #7: Leasing

Small businesses in certain industries need equipment to get started. One way to finance the equipment is to lease it through a finance company. Most equipment leases are structured so that the finance company buys the equipment and rents it to you for a monthly payment. Once the term of the lease concludes, you can buy the equipment from the finance company for a fairly modest cost.

Source #8: Venture capitalists and angel investors

Venture capitalists and angel investors can be a great source of financing if your company has the right opportunity for them. Consider venture financing only if you have an innovative concept with high margins that can scale quickly. Getting this type of funding is notoriously difficult. As a matter of fact, many entrepreneurs spend weeks or months creating presentations and pitching to venture capitalists and end up with nothing to show for their efforts.

Several more funding such as these currently exist and can be found online using a simple Google Search. Just type “Funding Opportunities for Nigerian Entrepreneurs” on Google search and you would see these results displayed.




  1. AMOS .N. FARISA says:

    What a wonderful piece. But what do u do when you have a project, community a’re not playing their part to assist you, what do you do?

  2. Superb Piece @faidat but what if you want to start up a fresh business but its very uncommon like E-Farming but have tried getting grants from a lot of people and its not coming through, do you advice such a person to forget that business and go seek for employment so as to sustain himself?

  3. […] Here’s a known fact:  Many people’s visions are embedded in yours and at the same time your vision is only a part of another vision?  Let us break it down a little further. Every country has a vision which it tries to attain through its policies. In most cases, many of our visions are only a part of the nation’s vision. As such, it becomes imperative to always find a national policy to connect with when sourcing for funds. Put it this way: if you are working in the educational space, you should find out what the vision of the nation is, what the policies in this sector are and how you can align yourself with them. Note however, that the idea is not to follow the budget but to follow the policy. And the good news is that when you solve problems in line with policies, you are more likely to get funds from various other sources (Click here to read complete blog post on the various sources of funds). […]

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