Opera News

Opera News App

Africa’s SME's and funding opportunities.

Bash1
By Bash1 | self meida writer
Published 10 days ago - 5 views

It can be really hard to start and grow a new business in Africa. One of the biggest reasons for this is poor access to capital. Lack of funding chokes creativity and business ideas on the continent and continues to frustrate Africa’s entrepreneurs and small businesses.

To make a bad situation worse, banks and governments are not providing sufficient capital to support Small and Middle-scale Enterprises (SME's).However, large and established companies usually face few obstacles, if any, in accessing funds to operate and expand their businesses.

The funding gap for SMEs in Africa is currently estimated at over $140 billion.That’s a huge gap that will likely continue to increase if the current situation remains unchanged. Nevertheless, there is hope on the horizon. Here are a few interesting initiatives, trends and opportunities that could plug the funding gap and unleash the full potential of Africa’s SME's for savvy investors.

a) Venture Capital

This is a common form of financial capital that is usually provided to early-stage and high-potential startup companies. Although the risks can be high, the rewards can be quite huge for the investors. In developed regions like North America, venture capital is a major source of funding for startups and small businesses. In the US, for example, venture capital is responsible for investing up to $30 billion in small businesses every year.

Venture capital (VC) as a source of funding is still in its infancy in Africa. Although there are a couple of promising small businesses on the continent that have benefited from VC funding, the potential in this area is still largely under-explored.

b)Angel Investment -

Angel investors or ‘angels’ are wealthy individuals who provide capital for, and invest in, startups and small businesses. Unlike venture capitalists who invest pooled funds (other people’s money), angels typically invest their own money.

c) Crowdfunding

This is proving to be a game-changer in the way that startups and small businesses can raise capital. Crowdfunding is essentially the practice of raising capital through contributions from a

large number of people, typically via the internet. It’s a fast-growing industry that raised more than $5.1 billion worldwide in 2013.

Business Concept

If you have some capital at hand, investing that in African startups or an existing business is a great way to participate in Africa’s emerging economy without the need to open your own business. But chances are that this is not what you are looking for in this book.The good news is that you can turn the huge need for business financing that is hindering the majority of Africa’s entrepreneurs to your advantage. It is a gap that you can put at the center of your business concept. But instead of providing the capital, you are raising it through your funding venture, which could be a firm or an online platform.

Content created and supplied by: Bash1 (via Opera News )

Opera News is a free to use platform and the views and opinions expressed herein are solely those of the author and do not represent, reflect or express the views of Opera News. Any/all written content and images displayed are provided by the blogger/author, appear herein as submitted by the blogger/author and are unedited by Opera News. Opera News does not consent to nor does it condone the posting of any content that violates the rights (including the copyrights) of any third party, nor content that may malign, inter alia, any religion, ethnic group, organization, gender, company, or individual. Opera News furthermore does not condone the use of our platform for the purposes encouraging/endorsing hate speech, violation of human rights and/or utterances of a defamatory nature. If the content contained herein violates any of your rights, including those of copyright, and/or violates any the above mentioned factors, you are requested to immediately notify us using via the following email address operanews-external(at)opera.com and/or report the article using the available reporting functionality built into our Platform

YOU MAY LIKE

Covid: Texas moves to lift cover command and straightforwardness Covid rules

19 minutes ago

1 🔥

Covid: Texas moves to lift cover command and straightforwardness Covid rules

Music industry going down

2 hours ago

3 🔥

Music industry going down

Meet Toheeb, the hilarious celebrity impersonator

4 hours ago

36 🔥

Meet Toheeb, the hilarious celebrity impersonator

12th March Approaches Who Will Read Ghana's 2021 Budget? - Ken Ofori-Atta Yet To Return From The US

4 hours ago

85 🔥

12th March Approaches Who Will Read Ghana's 2021 Budget? - Ken Ofori-Atta Yet To Return From The US

Akufo-Addo to deliver 8th state of the Nation Address on March 9th

6 hours ago

241 🔥

Akufo-Addo to deliver 8th state of the Nation Address on March 9th

Utilize this plant to support your male organ

6 hours ago

16 🔥

Utilize this plant to support your male organ

Kumasi Girls and UPSA model selling vitamin D for dollars (Photos)

6 hours ago

1 🔥

Kumasi Girls and UPSA model selling vitamin D for dollars (Photos)

Steer clear from liver disease by curing hepatitis b naturally

7 hours ago

7 🔥

Steer clear from liver disease by curing hepatitis b naturally

Look Good, Be Bold And Appear Cute As You Wear Any Of These Dress Styles Designed To Make You Bright

9 hours ago

2053 🔥

Look Good, Be Bold And Appear Cute As You Wear Any Of These Dress Styles Designed To Make You Bright

Agya Koo has a special seat in Heaven, he is an Angel in the form of a man- Popular Prophet reveals

9 hours ago

702 🔥

Agya Koo has a special seat in Heaven, he is an Angel in the form of a man- Popular Prophet reveals

COMMENTS