Foyinsolami Akinjayeju, Chief Executive Officer of Enhancing Financial Inclusion and Advancement (EFInA), has called on small and medium-sized enterprises (SMEs) to rethink their approach to financing, urging them to look beyond conventional loans and identify capital that aligns with their operational needs, growth ambitions and repayment capacity.
Akinjayeju noted that only about 10 percent of Nigerians had accessed formal credit according to the A2F 2026 insights, highlighting the need to improve access to appropriate financing while helping entrepreneurs make informed borrowing decisions.
She cautioned that debt could accelerate business failure if repayment obligations exceed a business’s capacity to generate cash flow.
Rather than treating borrowing as the default response to a funding need, she encouraged entrepreneurs to assess their productive capacity, identify operational bottlenecks, and determine what type of financing would address their specific challenges.
“Before seeking capital, business owners need to understand their productive capacity, identify the constraints holding their businesses back and determine what financing is appropriate for their needs. The question is not simply how to get money, but how to get the right kind of capital for the right purpose,” she said, at the ninth edition of the Caladium Lagos SME (CLSME) Bootcamp held in Lagos.
Ayo Bankole Akintujoye, convener of the CLSME Bootcamp, also noted that capital is frequently cited as the biggest obstacle to business growth, even when entrepreneurs may need to address other constraints first.
Business owners however need to examine their financing needs more carefully and understand the range of options available to them.
There are three considerations for SMEs seeking capital which includes purpose, proof and partners.
Purpose requires business owners to establish exactly what the funding will achieve and how it will address a specific business need.
Proof involves demonstrating the ability to execute through reliable financial records, cash flow evidence, repeat customer orders, and a track record of fulfilling commitments.
Partners refer to relationships with customers, suppliers, investors and other business associates who may provide financing or facilitate access to it.
Akinjayeju therefore encouraged business owners to look beyond conventional loans, and she introduced the mnemonic CAPITAL as a framework for understanding seven alternative financing pathways.
This includes Customer Advances and deposit-backed pre-orders, Asset Leasing, which allows businesses to access productive machinery and equipment without paying the full purchase price upfront
Payables and Supplier Credit, through negotiated payment terms that free up working capital
Invoice Financing to enable businesses to obtain early payment against qualifying unpaid invoices
Third-Party Equity Investments, through which businesses raise capital in exchange for ownership
Awards and Grants that can provide non-repayable funding for eligible programmes, and finally, Leveraged Group Financing in the form of savings and credit within cooperatives.
Akinjayeju emphasised that the right financing option is not necessarily the easiest to obtain, and that not all seven pathways will suit every business.
Entrepreneurs must assess which option best aligns with their business stage, funding purpose, cash flow and growth ambitions, while carefully considering the obligations and trade-offs associated with each source of capital.
She also noted the need for business owners to build relationships before they need financing.
A history of trust, reliable delivery and sound business practices can definitely strengthen their ability to secure support when funding opportunities arise.
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