The World Bank (a member of the World Bank Group) is an international finance body; a monetary international finance organization capable of providing funds to nations for capital intense projects. This post will focus on a full explanation of how to apply for world bank grants in Nigeria for small businesses (SME). The world is made up of two institutions: The International Bank for reconstruction and development (IBRD) with 189 countries as members and the International Development Association (IDA) with 173 countries as members. The goal of the World Bank is to extensively reduce the level of global poverty.
World Bank Grants In Nigeria
The World Bank since the year 1958 has been being helping the Nigerian government to fight to alleviate poverty and develop the living standards for the populace of the African Nation with well over 130 IBRD loans.
The World Bank Group has been a strong ally of the Nigerian government. She supports Nigeria around the following priorities:
- Creation and sustaining of growth in the diversification of jobs especially for young people, poor people, and women in the side-lined area.
- Re-establishing macroeconomics and financial growth by fine-tuned policy sponsoring and performance responsive lending.
- Agricultural-based funding with the intent to increase viable productivity.
- Investing in and promote ng growth and reforms towards non-oil growth and economic viability.
- Tackling the issues of climate change
- Restoring order in the conflict-affected zones of northeast Nigeria.
- Advocating for governmental and cultural commitment to gender equity
- Optimization of the quality of social service.
The World Bank has been courageous in encouraging the Nigerian economy through its efforts in the banking sector. In the banking sector, she hopes to invest in grass-roots businesses through the model microfinance banking system. The bottom-up project as it is called will encompass the push of over 10 billion nairas in form of grants to help startup model microfinance banks that will in turn sequentially, give power to billions of local businesses to kick off and grow courtesy of the World Bank.
World Bank Grants In Nigeria For Small Business
What Is A Small Business Grant?
A small business grant is the degree of funding made available to an entrepreneur to start a new business or to expand an existing one. Unlike the case of what obtains with loans, not all grants are will be required to be paid back by the financier. Usually, small business grants come from various sources like government empowered organizations, international organizations, and non-governmental organizations.
World Bank Grants In Nigeria For Small Business
TYPES OF SMALL BUSINESS GRANTS IN NIGERIA
Small business grants are available in different scenarios, such as the following:
This is a cash award, given as part of the start-up capital or expansion budget for a business. The cash award makes up part of the total cost. Most awarded of this type of grant will require that the applicant himself/herself have a substantial cash investment in the overall total of the required capital.
This kind of grant is offered without interest to a business owner. It is expected that the entrepreneur pays back over a period of time from future revenues gained from the business operation. However, in the eventuality that the business fails or collapses, the repayment of the grant is scrapped out.
This is a form of a grant that is structured like a loan, the difference is that the interest may be very minute or non-existent. The repayment plans are way relaxed and spread thinly over a large period of time.
In this type of grant, some resources are inserted into the business. This allows the supplier of the grant to take an equity share in the enterprise.
PROS OF TAKING SMALL BUSINESS GRANTS IN NIGERIA
- Securing a grant means that you have eventually gotten the capital that you needed to have started or executed the long-awaited expansion of your business. And most of the time you will not have to repay the money, further building the capital base of your business. Even if you have to pay back the grant, the repayment settings are very friendly, relaxed, and business-friendly such that it won’t place any heavy pressure on you or your business.
- No sharing of control: Unlike what the case is with the demands of equity financing, you as an entrepreneur will not have to relinquish your right to equity or have to compromise your established plans with shareholders.
- Brand respect: by winning one business grant, your brand attracts to itself a good impression – that is the fact that the grant provider deemed your business to be grant-worthy speaks volumes about the quality of your business and the sustainability and viability of your business structure. This will give more credibility to your business before investors and financial institutions in case there is a need to further approach them for loans.
- More grants: Once you win one grant, because of the reasons stated in the previous paragraph, it becomes very much easier to secure another one. This is, even so, the case since you have become familiar with the process and have built a firm relationship with the provider of the grant.
CONS OF SMALL BUSINESS GRANTS IN NIGERIA
- Ultimate competition: due to the large number of people applying for grants, competitions for grants are very fierce and demanding. As a result, you must be ready to conform and beat the stringent measures that grant providers adopt to choose only a few deserving businesses.
- Partial funding: Grants providers will hardly give you the total amount of capital that you need. Many of the business grant providers will expect you to secure cash equivalent to a percentage of the overall needed capital. While the percentage varies from provider to provider, to be expected to come up with 50% of the grant is not uncommon. Thus, you will have to get funding from other sources shortly before or after you get the grant.
- The specificity limitation: as specified in your business plan, many of the grant providers require that you use the funds provided strictly for a specific part of your business plan that they intend to cover. For example, in the case where they seek to help you acquire working equipment, you will not be permitted to use that fund for any other thing in your business.
- Funds may be delayed: to guarantee that the grant would be used for exactly what it was intended for, some grant providers will purposely delay the release of the grant until you have successfully accomplished the project of starting or expanding your business with funds from other sources.
- Lengthy application process: The average application for a grant takes time ranging from a few days to sometimes months to finish the application.
- Less flexibility: as stated above, funds gotten from the grant must be used for exactly the purpose in the exact same way as purposed in the grant application or business plan. Failure to comply with this may lead to the loss of the grant.
HOW TO APPLY FOR WORLD BANK GRANTS IN NIGERIA FOR SMALL BUSINESS
Please note that the more reliable the source of the grant, the fiercer the competition, and the more difficult it would be to access it. Therefore, it is much easier to win a business grant awarded by a local NGO than it is to win one awarded by the Federal government grant or even one that is established by an international organization.
You should also study the requirements and eligibility criteria of the grant you seek to apply for to know if your business is qualified to receive it.
Here, however, are few tips on how to apply for the Word Bank grants in Nigeria.
- Refer to the website of the World Bank or the National and Local bodies they operate through to get the specifics of the grant that you seek.
- Write a proper and compelling business plan. Be assured that the grant providers will dissect your business plan meticulously to determine the worthiness of your business to be supported by the supported with the grant.
- Meticulously read and understand the specifics guiding the grant application process. Failure to complying with application guidelines is the shortest route to failure.
- Do your research, consult business owners who have previously won grants and milk them for all the information and advice you can get.
- Critically access yourself and your business to ascertain if you are qualified for the grant that you want to apply for.
- Begin to work on your grant application, making sure that it fits all the laid down guides by the grant providers. Study and get all the materials that may be needed in the course of filling the application.
- Review your application thoroughly to pinpoint perfection, make sure to keep a copy of your responses in your personal records. After this, you can then submit your application through the specified medium. And await the grant providers’ response.
CONCLUSION ON THE WORLD BANK GRANTS IN NIGERIA FOR SMALL BUSINESS
The interest of the World Bank in empowering Nigerian youths through grants has been an underused avenue by Nigerians. This may be because of the fact that many are not aware of such avenues, and those that are aware do not put in the adequate work required to be considered serious enough to be deserving of such a grant.
Our advice to you dear grant seeker is to keep putting in quality work and keep trying no matter how many disappointments you face, because, one of these days you will get the result you seek.