EFInA Urges SMEs to Explore Funding Beyond Bank Loans

The Chief Executive Officer of Enhancing Financial Inclusion and Advancement (EFInA), Foyinsolami Akinjayeju, has urged small and medium-sized enterprises (SMEs) to explore alternative sources of financing beyond conventional bank loans to support business expansion.

Akinjayeju gave the advice during a panel discussion titled, “Access to Capital Beyond Loans: What SMEs Need to Know in 2026,” at the ninth edition of the Caladium Lagos SME Bootcamp held in Lagos on October 31.

She cautioned business owners against excessive borrowing, noting that repayment obligations could undermine their operations when they exceeded the businesses' cash flow capacity.

Drawing on findings from EFInA's Access to Financial Services (A2F) 2026 report, she said only about 10 per cent of Nigerians had accessed formal credit, highlighting the need for improved access to appropriate financing.

She advised entrepreneurs to assess their productive capacity, identify operational constraints and determine the type of funding suitable for their business needs before seeking capital.

According to her, businesses should consider three key factors: purpose, proof and partners.

She explained that purpose involved identifying what the funding would achieve, while proof required businesses to demonstrate their capacity to execute plans through reliable financial records, cash flow evidence, repeat customer orders and a history of fulfilling commitments.

On partnerships, she encouraged entrepreneurs to build relationships with customers, suppliers, investors and other business associates who could provide or facilitate access to capital.

Akinjayeju also introduced the acronym CAPITAL as a framework for identifying seven alternative financing options available to SMEs.

These include customer advances and deposit-backed pre-orders, asset leasing, supplier credit, invoice financing, third-party equity investments, awards and grants, and leveraged group financing through cooperative savings and credit arrangements.

She explained that customer advances could provide funds for production before delivery, while asset leasing would enable businesses to acquire machinery and equipment without making full upfront payments.

Supplier credit and invoice financing, she added, could ease working capital pressures, while equity investment would allow businesses to raise funds in exchange for ownership stakes.

The EFInA chief executive stressed that no single financing option was suitable for every enterprise, urging business owners to consider their operational stage, cash flow, funding requirements and growth objectives before making decisions.

Also speaking, the convener of the bootcamp, Ayo Bankole Akintujoye, said entrepreneurs frequently identified inadequate capital as their biggest obstacle to growth, even when other operational challenges required attention.

He explained that the session was designed to help business owners understand their actual financing needs and become familiar with funding opportunities beyond conventional bank lending.

The organisers said the first eight editions of the bootcamp had directly impacted more than 10,000 SMEs, while the ninth edition attracted over 1,500 physical participants, with another 2,000 expected to participate virtually from across Africa.