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Nano, Micro, Small, Medium and Large Businesses: Igniting Funding and Capital Raising With Over 25 Different Options in a Pandemic

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Timi Olubiyi funding

By Timi Olubiyi, PhD

In the country, apart from the known business challenges such as the decrepit infrastructure, inconsistent government policies, double taxation, regulation irregularities and the pandemic disruptions in recent times, overwhelmingly, lack of capital or funding issues contribute majorly to business failures.

According to findings of several surveys, one of the top challenges faced by entrepreneurs and businesses in Nigeria today is access to funding.

Seemingly, funding is the bloodline of any form of business, therefore, whether it is a startup, nano, micro, small or medium-sized business, or an established large firm, knowing how to raise capital can often make the difference between business success and failure.

In fact, funding is important at all business stages and cash which is most time refer to as “capital” in business terms majorly dictates the pace of performance in any business. Simply put capital is the energy source that all businesses need to operate, grow and mature into a strong, vibrant enterprise.

Invariably, without funding or capital, it will be extremely difficult to get any enterprise off the ground. However, the structure that exists in the business significantly affects the access to the choice of fund options.

Recall, every business has a different structure and needs, it is, therefore, imperative to state that no financial solution is one size fits all, fund options usually require different rules and steps.

Consequently, businesses will be required to carefully plan, research, learn, and understand the necessary funding option in order to come up with the right decision.

So, the big question for businesses is what are the ways to adequately raise capital for seamless operations? And this is the focus of this piece.

Capital comes into any business particularly in two ways: as equity and as debt. However, donations, grants, incentives, interventions, or subsidies can also be employed in certain aspects of a business to encourage activities in particular industries or sectors by the government.

Some government agencies and institutions responsible for this include the Bank of Industry (BOI), the Nigerian Export Promotion Council (NEPC), the Central Bank of Nigeria (CBN), Bank of Agriculture (BOA), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Development Bank of Nigeria (DBN), Nigerian Export-Import Bank (NEXIM) among others.

Just like other forms of capital raising options these grants and subsidies can be initiated for either short-term or long-term purposes.

That said, equity capital involves exchanging a portion of the ownership of the business for financial investment in the business, most times it involves selling shares of the company in exchange for funding.

Equity capital is raised when a business sells its shares to investors. The ownership stake resulting from this equity investment allows the investor to share in the company’s profits.

Equity capital is usually a cheap form of funding and is an important source of capital on a long-term basis. However, sometimes it involves going public, getting listed on an exchange and also giving up partial or major control of the business.

On the other hand, debt capital is when a business borrows fund from individuals or institutions and agrees to pay them back later. Debt capital simply means loans and borrowings. The main consideration in debt capital is the ability of the business to generate sufficient returns to service the debt (interest and capital repayment).

A typical mode of raising debt capital is through bank loans. Banking institutions provide loans to individuals or businesses who approach them with a solid business plan and good business structure with capacity for repayment.

Bond is equally a debt instrument and a way of raising debt capital as well. Without doubts, it belongs to debt capital categorisation because the authorised issuer (business) owes the bondholder debt and it depends on the terms of the bond issuance.

The most significant difference between equity and debt is that, unlike debt, equity capital does not require an amortisation schedule for repayment. More so, equity capital involves the investor taking an ownership position in the business.

Significantly, there are several sources to consider when seeking business funding or any financing, some of them are expressed here.

The easiest and starting point for small businesses from context observation is usually with self-funding and personal investment, where entrepreneurs leverage their financial resources to support business operations.

Self-funding can extend to family, associates and friends for capital, otherwise referred to as bootstrapping. Both self-funding and bootstrapping lets business managers, operators and entrepreneurs leverage their financial resources to support the business operations.

Further to this is angel investment, where investors who are generally wealthy individuals or retired business executives invest directly in a business or startups owned by others.

These angel investors are often leaders in their field who not only contribute their experience and network of contacts but also their technical and/or management knowledge. Most times, this form of capital raising is in exchange for equity ownership in the business and an active management role.

Also, trade credit is another significant form of capital raising option where business suppliers are willing to transact or sell on credit.

Such credit may range anywhere from one month to three months or as agreed. This is a very good method for businesses to fulfil short-term funding needs. It is an inexpensive method of funding for any business, I must say.

Further to this is private equity investment, where private equity firms raise equity capital that is not listed on any stock exchange for investment purposes.

Invariably, these firms raise funds from investors and then invest these funds in promising startups and businesses that require capital. The drawback of this funding option is that a controlling position or substantial minority position in the business is usually acquired and then look to maximize the value of their investment.

Thus, the entrepreneur might not have sole control over the business decisions, which may lead to conflict.

Looking at another capital raising option is retained earnings as a way of raising finance. It simply means businesses can reinvest any set-aside profits for business operations for expansion, equipment purchase, and development purposes.

In recent times, the use of crowdfunding to fund business operations is on the rise, where a large number of subscribers, called crowd funders, contribute or invest in a company or project.

A typical example of crowdfunding is proposing subscribers to invest N1000 and even if 1000 people invest, the business can raise N1,000,000 easily. Crowdfunding is getting popular because it is low risk for business owners and full business control is retained.

Crowdfunding continues to gain popularity with the rise of social media and the internet because it became easier to reach several people by putting in the minimum effort through this medium.

Some not too popular funding options include invoice factoring sometimes referred to as invoice advances which is an option where a business sells its receivables at a discount to get cash up-front.

It allows businesses to borrow funds against the value of invoices due from customers. Invoice factoring can be a great option if you have many corporate clients who have long payment terms or tend to pay as late as possible.

In addition to this is a business overdraft, which can be an ideal source of finance for short-term funding. An agreed overdraft lets businesses use their current business account to make payments that exceed their available balance in the bank.

Another similar source of short-term capital raising option is the business credit card. This is commonly used by structured businesses to access agreed funds on credit in the bank.

Fund withdrawal in life insurance policies and pension funds are other options for entrepreneurs and business owners. Many insurance companies have, in recent years, liberalized their criteria for allowing policyholders to borrow against the value of their policy.

There are other methods for funding such as though strategic alliances, getting business loans from microfinance providers, selling assets, access to inheritance, hire purchase/leasing, raising funds by winning contests, through co-operative society is another means, informal contributions (Esusu), gift and donations, franchising, or through on-line financing services are others but these should be used only if you need funds urgently, you are qualified and know the risks involved.

The key information from this piece is that there are many business funding options available for businesses. Therefore, business owners, managers and entrepreneurs do not have to get discouraged if one does not work out, other options can easily be explored.

To find the right fit, in-depth research and adequate due diligence are imperative, having in mind these following questions- how much is really required for the business? When is it required? How long will it take to raise the funds? What are the specific requirements to access the fund? What will the fund be used for? What is the associated risk with the fund type? From whom is best to raise the fund? How expensive is the fund? How and when is repayment? Is the business actually fundable or bankable? Because some fund option may be a perfect fit for a business situation, while others may be completely impractical, therefore due diligence is absolutely required.

Aside from every business having unique funding needs, each funding option also differs in availability, terms, funding amount option, and eligibility criteria. Therefore, each fund option needs detailed attention ahead of time. Whether a business opts for a bank loan, an angel investment, or a government grant, note that each of these sources of financing has specific advantages and disadvantages. Good luck!

How may you obtain advice or further information on the article?

Dr Timi Olubiyi is an Entrepreneurship and Business Management expert with a PhD in Business Administration from Babcock University Nigeria. He is a prolific investment coach, seasoned scholar, Chartered Member of the Chartered Institute for Securities and Investment (CISI), and the Securities and Exchange Commission (SEC) registered capital market operator. He can be reached on the Twitter handle @drtimiolubiyi and via email: drtimiolubiyi@gmail.com, for any questions, reactions, and comments.

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Nigeria’s Bold Strides Towards a Sustainable Future

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Alex Oware YP4T

By Alex Oware

President Bola Tinubu has firmly established Nigeria as a proactive and visionary leader in the global pursuit of climate action and sustainable development. Recognising that environmental stewardship is intrinsically linked to economic prosperity, his administration has moved beyond viewing climate change as a mere ecological concern, positioning it instead as a pivotal economic opportunity ripe for exploration and investment.

President Tinubu’s emphatic pronouncements at the 2025 Abu Dhabi Sustainability Week and during a high-level virtual dialogue underscored Nigeria’s unwavering commitment to international collaboration, emphasising the critical need for a unified global response to the escalating climate crisis. He astutely highlighted that the realisation of a truly sustainable future necessitates robust global interconnectedness and a shared sense of responsibility amongst all nations.

Nigeria’s comprehensive strategy for tackling the multifaceted challenges of climate change rests upon three fundamental pillars: a decisive shift towards clean energy transition, the building of robust climate resilience, and an overarching commitment to sustainable development. To translate these core principles into tangible realities, the current administration is actively implementing a range of key initiatives designed to wean the nation off its reliance on traditional fossil fuels.

A significant aspect of this endeavor involves the substantial expansion of infrastructure to support the widespread adoption of Compressed Natural Gas (CNG) and electric vehicles. Simultaneously, the government is strategically focusing on harnessing Nigeria’s abundant solid mineral resources to provide crucial materials for the burgeoning green energy sector.

Complementing these efforts are the implementation of climate-smart agricultural practices, aimed at simultaneously enhancing national food security and minimising detrimental environmental impacts.

Furthermore, the newly introduced National Clean Cooking Policy seeks to promote clean energy solutions at the household level, promising significant environmental, health, and socio-economic benefits for Nigerian citizens.

These ambitious endeavors are meticulously designed to deliver palpable value and positive impact directly to the lives of Nigerians. The diversification of energy sources holds the promise of cleaner air and a significantly healthier environment for communities across the nation.

The active promotion of CNG as a viable alternative fuel is strategically aimed at mitigating the economic and social hardships that have arisen from the removal of fuel subsidies, offering a more affordable and sustainable energy option for transportation and domestic use. The widespread adoption of climate-smart agriculture is paramount for bolstering food security, ensuring a stable and reliable food supply, and safeguarding vulnerable local communities from the increasingly severe adverse effects of climate change, such as droughts and floods.

Moreover, the deliberate expansion of the green energy sector is projected to generate a wealth of new employment opportunities and empower local entrepreneurs, particularly in rural communities that are gaining access to reliable and sustainable electricity for the first time.

In a demonstrably bold move that underscores the administration’s commitment to these overarching goals, President Tinubu’s government has put forward a significant N10 billion solar power project specifically for the Aso Rock Presidential Villa. This ambitious initiative is presented as a crucial step towards establishing a more sustainable and dependable energy future for the entire nation, starting from the highest levels of governance.

Proponents of the project persuasively argue that it aligns seamlessly with global best practices, drawing parallels with the increasing adoption of solar energy in key government institutions worldwide. The Energy Commission of Nigeria (ECN) has vigorously defended the project, asserting that it is fully in line with President Tinubu’s broader reforms aimed at fundamentally transforming Nigeria’s energy landscape and decisively tackling the persistent and crippling energy debt crisis.

The ECN further emphasises that solar energy offers inherent efficiency, provides a crucial shield for Nigerians against the volatility of rising tariffs on conventional energy sources, and has the potential to significantly ease the immense pressure currently burdening the national electricity grid.

While the project has understandably sparked public debate and scrutiny regarding its substantial cost and prioritisation in the face of other pressing national needs, the government strategically positions it as an innovative approach that demonstrates leadership by example and a profound commitment to integrating clean energy solutions at the very apex of Nigerian governance.

Beyond these crucial domestic initiatives, President Tinubu has actively and strategically sought robust international collaboration and support for Africa’s complex transition towards a green economy, fully acknowledging that the necessary investments are inherently capital-intensive.

Nigeria has already demonstrated commendable leadership on the continental stage by being the first African nation to successfully launch Sovereign Green Bonds, specifically designed to finance environmentally sustainable projects across various sectors.

Furthermore, the country is actively in the process of developing a comprehensive Global Climate Change Investment Fund, with the primary aim of attracting substantial further investment in critical green infrastructure and innovative clean energy initiatives.

Nigeria remains steadfast in its commitment to achieving net-zero greenhouse gas emissions by the ambitious target year of 2060 and is actively engaged in the crucial process of updating its Nationally Determined Contributions (NDCs) under the esteemed UN Framework Convention on Climate Change.

The recent finalisation of the Nigeria Carbon Market Activation Policy in March 2025 is projected to unlock a substantial potential of up to $2.5 billion in valuable carbon credit investments by the pivotal year of 2030. This influx of capital is expected to further bolster climate-aligned economic growth and create new avenues for sustainable development.

Moreover, Nigeria is actively collaborating with various United Nations agencies to develop a comprehensive guideline for a just transition towards a fully decarbonised economy. This crucial collaboration ensures that the inevitable shift towards clean energy and climate-resilient solutions is implemented in a manner that leaves no community or economic sector behind, prioritising the creation of green jobs, the development of essential skills, and comprehensive capacity-building initiatives across the nation.

President Tinubu’s overarching strategy underscores a holistic and integrated approach that seamlessly weaves climate action into Nigeria’s broader development agenda, recognising it not as a separate concern but as a fundamental strategic imperative for sustained economic growth and comprehensive national transformation.

By diligently pursuing these comprehensive and interconnected strategies, Nigeria aims not only to effectively address the urgent and pressing challenges posed by climate change but also to unlock significant and lasting economic and social benefits for all its citizens, paving a clear and sustainable pathway towards a resilient, equitable, and prosperous future for generations to come.

Alex Oware is the Regional Director for YP4T

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Navigating the Maze: Solutions for Nigeria’s Flourishing Foodtech Industry

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Diana Tenebe food security challenges in Nigeria

By Diana Tenebe

Nigeria’s foodtech sector holds immense promise to transform our nation’s food production, distribution, and consumption systems. However, this burgeoning industry currently navigates a complex maze of challenges that could significantly hinder its progress.

While innovation and entrepreneurial drive are abundant, a confluence of infrastructural deficits, economic headwinds, technological disparities, and logistical complexities casts a shadow on the sector’s long-term viability.

Understanding and addressing these multifaceted hurdles is paramount for foodtech companies aspiring to thrive and contribute meaningfully to Nigeria’s food security.

One of the most significant impediments to the foodtech sector’s advancement is Nigeria’s persistent infrastructural weaknesses. The unreliable power supply, a well-known constraint for businesses nationwide, directly threatens food preservation, increasing spoilage risks and driving up operational costs for companies reliant on refrigeration and consistent processing.

Similarly, the often-deteriorated state of our road networks complicates logistics and transportation, hindering the efficient movement of goods from farms to consumers and across the supply chain.

Furthermore, limited access to clean water exacerbates operational challenges, particularly for maintaining food processing and hygiene standards. Collectively, these infrastructural shortcomings inflate operational expenses and introduce vulnerabilities throughout the food supply chain.

Economic constraints add another layer of intricacy. Fluctuations in currency exchange rates create instability in pricing and procurement, especially for businesses dealing with imported technologies or ingredients. Persistent inflation erodes consumer purchasing power and increases the cost of essential inputs, squeezing profit margins for startups.

Moreover, limited access to credit and investment capital makes it difficult for emerging foodtech companies to secure the necessary funding to invest in crucial technology, infrastructure, and expansion efforts. This financial constraint can stifle innovation and prevent promising ventures from reaching their full potential.

The digital divide also poses a unique challenge for foodtech companies aiming to leverage online platforms and digital solutions. While mobile phone usage is widespread in Nigeria, disparities in digital literacy and access to reliable internet connectivity can restrict the widespread adoption of online food ordering and delivery services, particularly in rural and underserved communities. This necessitates creative and inclusive strategies to bridge the digital gap and reach a broader consumer base.

Inefficiencies within the supply chain represent a critical bottleneck in the Nigerian food system. Fragmented agricultural supply chains, characterised by numerous intermediaries and a lack of transparency, contribute to alarmingly high post-harvest losses.

Inadequate storage facilities and inefficient transportation infrastructure further compound these issues, leading to significant waste and price volatility. Addressing these systemic weaknesses is crucial for ensuring a stable and affordable food supply for all Nigerians.

Navigating Nigeria’s regulatory landscape can also be a daunting task for foodtech businesses. The presence of multiple regulatory agencies, coupled with often bureaucratic and time-consuming processes for obtaining licenses and permits, can create significant hurdles for startups. Clear, consistent, and streamlined processes within the regulatory framework are essential to foster a more enabling environment for innovation and growth.

Building consumer trust and acceptance for new food technologies requires overcoming inherent skepticism and unfamiliarity. Concerns regarding food safety, quality, and the security of online transactions can hinder the adoption of novel food products and digital platforms. Transparent communication, robust quality control measures, and consistent consumer engagement are vital for building confidence and fostering widespread acceptance.

Finally, a notable talent gap exists within the Nigerian foodtech ecosystem. A shortage of professionals possessing specialised skills in food science, technology, business management, and logistics can limit the growth and innovation capacity of companies in this sector. Addressing this skills deficit through targeted training and development initiatives is crucial for long-term success.

Despite these significant challenges, promising pathways forward can be forged through innovative and context-specific approaches. Investing in localised infrastructure solutions, such as independent power generation and efficient localised logistics networks, can mitigate the impact of broader infrastructural deficiencies.

Exploring diverse funding avenues beyond traditional banking, including angel investors, government grants, crowdfunding, and revenue-based financing, can alleviate financial constraints.

Adapting to the digital divide by leveraging basic mobile technology and employing offline strategies like local agent networks can expand reach and inclusivity. Building resilient supply chains through direct farmer relationships, investing in aggregation centres, and utilising technology for farm management offer tangible solutions to logistical inefficiencies.

Proactive engagement with regulatory bodies and advocating for clearer, more supportive policies are crucial for navigating the regulatory landscape effectively. Building consumer trust necessitates transparent sourcing practices, clear communication about product benefits and safety, and active engagement with consumer feedback.

Finally, investing in talent development through collaborations with educational institutions and in-house training programs can bridge the critical skills gap.

Foodstuff Store is emerging as a business with a clear vision to directly confront several of these challenges. We are actively developing a decentralised network of businesses supported by strategically located distribution hubs across target states. This approach will directly address the limitations imposed by poor road networks, ensuring more localised access to our food products.

Furthermore, the establishment of regional storage facilities, including a state-of-the-art solar-powered cold storage, directly tackles infrastructural deficiencies related to food preservation and ensuring a consistent supply.

Foodstuff Store’s ambition for end-to-end management of the food supply chain, encompassing in-house production, direct sourcing, advanced storage solutions, and efficient distribution, offers a powerful solution to existing supply chain inefficiencies.

This integrated approach promises enhanced quality control, significant reductions in post-harvest losses, and a more reliable supply of both perishable and non-perishable goods for our customers.

Our aspiration to become the “Amazon for Food Products” is a clear and ambitious goal underpinned by a technology-driven approach to all aspects of our operational management. Foodstuff Store’s vision underscores a business model strategically designed to overcome significant hurdles within the Nigerian foodtech sector, offering a beacon of potential and a pathway to a more secure and efficient food system in a challenging yet remarkably promising landscape.

By Diana Tenebe is the Chief Operating Officer of Foodstuff Store

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President’s Katsina State Visit Exposes Disconnect from People’s Needs

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tinubu in katsina

By Abba Dukawa

The recent visit by the President Bola Tinubu to Katsina State has sparked concerns about the disconnect between the government’s priorities and the people’s needs. The visit exposed the hypocritical approach to the need of their people, states and the northern Nigeria as whole. The quality of leadership in the region has been questioned, with allegations of self serving  interest, ineptitude, and a lack of vision.

This is in spite of the fact that northern Nigeria as a whole faces numerous challenges that threaten its stability and development. Some of the key issues include insecurity, poverty, education, economic hardship, inequality and social and cultural challenges. The visit has been seen as an opportunity missed to engage with the state’s residents, listen to their concerns, and chart a way forward for development.

While the visit was marked by displays of pageantry and entertainment, the state’s pressing issues such as insecurity, poverty, and economic hardship, seemed to take a backseat.  Critics argue that the government’s focus on superficial events rather than addressing the root causes of the state’s challenges is a clear indication of a disconnect from the people’s needs.

The introduction of Rarara’s wife to the President by the Katsina State Governor, contravening cultural and religious norms, raise questions about leaders’ priorities and values.

Current leaders in the north seem more focused on personal interests and political survival than advocating for the northern Nigeria improvement.

Regardless of the challenges in the region the Governors  keep  praise for the President’s economic reforms, notwithstanding the region’s struggles, is concerning. economic reforms should lift people out of poverty, create jobs, and stimulate growth. If not yielding tangible benefits, they need reevaluation.

The north needs leaders prioritizing regional development and working towards a brighter future. Leaders understanding our region’s problems and committed to tackling them head-on are crucial. It’s time for a shift in approach, prioritizing people’s needs over personal interests.

As we move forward, we must demand more from our leaders. We need leaders who will stand up for the north and work tirelessly to find solutions. Anything less is a disservice to the region and its people.

We need leaders who cultivate a culture of good governance, prioritizing accountability and transparency to address insecurity and promote development.

The north needs a visionary leaders who prioritize all citizens’ needs, regardless of tribe or religion, are crucial for unity and stability.

Leaders who accelerate economic development, create jobs, and provide essential services like education and healthcare can reduce poverty and insecurity.

We require leaders who will combat corruption and promote social justice, reducing inequality and fostering stability.

In northern Nigeria, effective security reforms are necessary, including modernizing security agencies, enhancing intelligence gathering, and addressing insecurity’s root causes to ensure public safety.

To bridge the gap between the government and the people, there is a need for leaders who understand the intricacies of the state’s problems and are committed to tackling them head-on. By prioritizing the people’s needs and working towards sustainable development, the government can build trust and foster a sense of ownership among its citizens

May God guide Nigeria towards true development and prosperity.

Dukawa, a concerned Nigerian, can be reached at abbahydukawa@gmail.com

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