A non-governmental organisation, Advocacy for Anti-Bribery, Corruption and Crime Prevention, has enlightened individuals, entrepreneurs, vulnerable women and people living with disabilities (PWD) on the different ways of sourcing funds and finance management for their Small and Medium-sized enterprises (SMEs) in Mushin local government area of Lagos State.
The lecture was organised by the organization under the Agent For Citizen-Driven Transformation (ACT) Program, in partnership with the British Council.
The Executive Director of the organization, Immam Moruf Okusanya, in his introductory remarks noted that the government cannot 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 will invariably alleviate poverty amongst them.
He also advised participants to follow to the teachings of the facilitators.
Delivering his lecture, Mr Ganiyu Jamiu, a Chartered Accountant, highlighted different ways to source funds. They include funding from personal savings, funds from friends and families, trade credit, interest-free loans and angel investors.
Explaining further, Jamiu said that funding from personal savings is the most common type of funding for small businesses.
He also stated that funds from friends and family is another great source because they generally trust you and it is easier to convince them. Adding: “It is easier and flexible with low interest rate or interest free unlike banks”.
He advised that they employ the right approach before approaching them, while ensuring that they also approach the right person too.
“Sit down and get the details of the loan. Agree on the loan repayment term. 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 advised.
He however warned that there is risk of loosing their money which might have adverse effect on their relationship.
Another option he mentioned, are angel investors.
According to Jamiu, these are business owners, executives and/or other successful individuals that have the means and ability to fund promising deals that are presented to them.
“Neworking is a great way to fund an angel investor for business”, he added.
Trade Credit, Jamiu said, is another easy way to obtain loans, but it usually comes with stringent arrangements to pay in scheduled and agreed date. “It is simple, but ensure you fulfil 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”, he stated.
Jamiu also mentioned profit ploughback as another source of raising funds for the purpose of expanding the business especially when there is depression such as during COVID-19. “You can do your business without relying on anyone”, he said.
Bank overdraft is also another source of raising funds, Jamiu added.
Also speaking to the participants, Mr Adedeji Fatai who spoke on finance management, urged participants on the importance of keeping proper record of their finances.
According to him, that is the only way to monitor the growth of their businesses. He mentioned 3 core areas in finance management, which include, paying yourself salary, planning ahead, paying debt timely and managing returns on investment.
Some of the participants expressed satisfaction with the lecture, and expressed gratitude to the organisers for thinking it worthwhile to speak to them on the pertinent issue of fundraising.