How To Get Seed Funding For Your Small Business In Africa
The challenges African entrepreneurs face trying to secure capital for their various startups can be a daunting task, especially since seed funding is important at the start or expansion of any business. The fund raising process is made even worse as very few organisations are always willing to offer small businesses loans, grants, or even any form of finance.
How then do small business owners get seed funding or the startup capital they need to start, run, and grow their businesses?
While pondering the answer to that question could get depressing for an entrepreneur that has tried severally to secure business finance to no avail, knowing there are many more options to explore in trying to get some startup capital can be reassuring.
See Also: 5 Ways To Finance Your Small Business
Here are 20 Organisations You Can Approach To Get Seed Funding For Your Small Business In Nigeria, Or Africa As A Whole:
1). Traditional Banks:
These have been around for decades in Africa and the world in general. They provide an institution for you to save and also withdraw your funds at anytime of your choosing.
Some examples of traditional banks in Nigeria are Zenith Bank, UBA Bank, Guarantee Trust Bank, First Bank of Nigeria, and several others. These banks don’t just provide a place for you to save your money, but also serve as an institution to help you grow your business, by granting loans to high performing small and large businesses.
Securing a loan in a traditional bank can get tedious because of the number of requirements the small business owner needs to meet. But despite its difficulties, it’s still achievable.
Visit the local banks in your country and find out the requirements for loan applications. If you fit into them, you can apply for a business loan. But it’s important you know that despite being a perfect fit for a bank, you may still not get the loan you need.
2). Micro-Finance Banks:
These banks primarily exist to fund small businesses with micro-loans. You can receive up to 5 million Naira ($15,625 ) from a micro-finance bank and sometimes more.
It’s a lot easier to secure a loan from a micro-finance bank than from a traditional bank. With lesser requirements and lighter restrictions, a micro-finance bank could be a far better option for you to approach instead of a traditional bank, when seeking startup capital for your small business.
3). Professional Money Lenders:
Professional money lenders like RenMoney in Nigeria could be the fastest way to get a small business loan. Their loan delivery times could sometimes be as low as 24 hours from the application time. Their requirements are very lenient, and most times require you only have a good paying job or own a high-valued automobile.
If you need a quick loan in less that 24 hours and think you may fit the really light requirements of these professional money lenders, then it’s a smart decision to apply for a loan through them.
4). The Bank Of Industry:
The Bank of Industry (BOI) exists to provide loans to businesses and institutions that largely use domestic raw materials; with a mission to also provide thousands of jobs for the unemployed populace in Nigeria.
The Nigerian Bank Of Industry (BOI) has an operating fund of 250 billion Naira ($781,250,000) to support small and large scale businesses in Nigeria. Applying to your country’s local BOI for a fund could be a great way to raise some seed funding for your small business.
You can view the Nigerian Bank of Industry’s (BOI) loan application criteria here, or call them on +2347002255264 or this (234)-1- 2715070-71 to make more enquiries on the loan application process.
5). The Bank Of Agriculture:
The Bank of Agriculture is primarily responsible for providing agricultural loans to farmers to start, run, and grow successful farm products in commercial quantity in Nigeria. It’s Nigeria’s foremost agricultural and rural development financial institution.
If your small business is primarily focused on agriculture (agro products), you can contact the Bank of Agriculture for an agric loan.
Rather than wasting a lot of time approaching banks, and several other financial institutions for a loan to start or grow your agriculture business, approaching the Bank of Agriculture (BOA) for an agric loan can speed up your chances of securing seed funding for your small business.
6). The Tony Elumelu Foundation:
The Tony elumelu entrepreneurship program is backed by a $100 million dollar fund with a mission to identify and grow 10,000 African entrepreneurs, create 1 million jobs, and add $10 billion in revenue across Africa over the next decade.
The foundation usually allocates a $5,000 dollar grant to several promising entrepreneurs from its power house fund.
You can apply to the foundation for a grant to start, run, or grow your small business.
7). African Women’s Development Fund:
The African Women Development Fund (AWDF) is a foundation that supports organisations that focus on empowering African women, by providing grants to aid their several small businesses.
The AWDF currently works together with several hundreds of women organisations to improve the lives of women and the African society at large.
The AWDF doesn’t just provide grant opportunities to African women, but also provides a platform to learn and network efficiently with mentors and several other African entrepreneurs.
You can apply for a grant at the African Women’s Development Fund (AWDF).
8). U.S African Development Foundation:
The U.S African development Foundation (USADF) is a body run by the American government to provide foreign assistance to the African community; especially in areas of extreme poverty.
The U.S ADF doesn’t just focus on the most vulnerable communities, but also provides grants (up to $250,000) for technical assistance and capacity building to grass root organisations.
If you’re certain your business model isn’t just profitable, but would also change the lives of the people around you, you can apply for a grant at the USADF.
9). African Development Bank:
The African Development Bank is an organisation focused on the economic development and social progress of its regional member countries (RMC). The bank doesn’t just mobilise and allocate resources for investment in its RMC’s, but also provides policy advice and technical assistance to support development efforts.
The ADB uses several entrepreneurship programmes to aid small and medium scale businesses in its various member countries. An example is the African Financing Partnership, amongst others.
You can visit their website here to get more information and a complete guide on how to benefit from one of their schemes.
The CDC group is an organisation poised to support the building of businesses throughout Africa and South Asia. The organisation has been investing in developing economies for over 60 years.
You can visit their website here to find out more information on how to apply for seed funding.
11). Acumen Fund:
Acumen is an organisation that raises charitable funds to invest in companies, ideas, and leaders that are changing the way the world tackles poverty.
If your business will provide jobs, alleviate poverty, and definitely change people’s lives, then you’re a good fit for the Acumen fund.
Visit their website here for more information.
12). Seedstars World:
Seedstars is a Swiss organisation that invests up to $1.5 million dollars on emerging market startups through it startup competitions in about 60 countries worldwide.
If you believe you have a ground breaking idea that is both feasible and could disrupt local markets, applying to the Seedstars competition for a grant is a great way to go.
13). African Innovation Foundation:
The African Innovation Foundation promotes innovation in Africa by providing seed funding to entrepreneurs with innovations poised to transform both Africa and Africans as a whole, through it’s “Innovation Prize For Africa” competition.
This fund focuses on creative companies, and not traditional businesses. With a great idea, you can apply for seed funding from this organisation.
14). Startup Accelerators:
Startup accelerators majorly invest in technology companies through a usually three month intensive acceleration program. They focus on helping these startups get their products to the market really fast, and help them figure out how to scale in the shortest time possible, before they pitch to more investors.
Accelerators could be great for some type of companies, but for others, they may not be a great fit.
Some startup accelerators in Africa are 440.ng, 88mph, Leadpath, and a couple of others.
15). Venture Capitalists:
These are organisations looking to invest at least $1 million dollars in companies that are past the startup phase. This means that these companies already know what their real product is, who their ideal customers are, and have shown reasonable traction in the short period of their existence.
Venture capitalists drive aggressive unnatural growth for the companies they invest in. They strive to make these companies attain high valuations in a very short time (usually 3 years), than they would have attained in about 15 to 30 years.
Some venture capitalists in Africa are Investment AB Kinnevik, Intel Capital, EchoVC PArtners, and a host of others.
This is a startup competition to drive small business and enterprise development in Nigeria. The YouWin competition could provide selected entrepreneurs with up to a 10 million Naira ($31,250) grant to start, run, and grow their businesses.
You can get more information from their website here.
17). Shell LiveWire:
According to their website, “Shell LiveWIRE is a social investment programme that aims to help young Nigerians explore the option of starting their own business as a real and viable career option.”
If you own a small business, or are an aspiring Nigerian entrepreneur, applying to the Shell LiveWire for seed funding is another great way to raise capital.
Etisalat runs the easybusiness millionaires hunt to empower the top 10 SME’s selected with the most innovative ideas with a 2 million Naira ($6,250) grant each. This grant provides a form of seed funding for these businesses to take their ideas to the next level.
If you’re a highly intuitive entrepreneur with an idea that’ll not just solve a real problem, but will positively contribute to the economic growth of Nigeria, applying to the Etisalat easybusiness millionaires hunt for seed funding is right for you.
19). She Leads Africa:
She Leads Africa is a yearly startup competition for female entrepreneurs all over Africa with viable innovate ideas that can qualify for a seed fund. The team with the best idea wins the star prize (usually around $10,000 or more) to grow their startups.
Ladies who believe their ideas will truly change their local communities or Africa as a whole, can apply for seed funding through the She Leads Africa startup competition.
See Also: 6 Startup Tips For Women Entrepreneurs
This is still a relatively new concept in Africa and is basically in its infant stage. Crowdfunding is basically the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet.
There’re large crowdfunding websites in America like Indiegogo and Kickstarter. While there’re a few in Africa like www.jumpstartafrica.com and a couple of others, their widespread impact still hasn’t substantially been felt. Overtime, their true value would manifest.
Still thinking of ways to raise seed funding in Africa? Try these out first, before you explore more options.
What are your thoughts on these 20 organisations to raise seed funding in Africa? Please let me know by leaving a comment below.
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