The time was 2:34pm and I sat with this middle-aged man looking all sweat in an air-conditioned office, my office.
This is one of the many request I face everyday from total strangers who approach my financial institution when in need of funds to argument their business.
Kazeem supply eggs to wholesalers within Lagos Metropolis, his sojourn pitched him with a contact and after few discussion, he was given an appointment and the outcome of the meeting was a LPO for the supply of 6,800 crates of egg.
That day was the first day I met Kazeem, I can't describe or point to his business, his account or transaction is not with my bank.
How do I help Kazeem achieved his objective?
This is the situation of many young and promising businesses whose manager's inability to forecast and prepare create challenges for the business whenever a break is within it reach.
Will you, as an investor, give money to someone you are meeting today, even if you are able to see the business and his house, are you sure the 30 minutes visit is enough for you to understand the business, confirm the owner, conduct proper KYCB?
Doing business involve creating, nurturing relationship, it is like seeing a lady that you wish to marry... irrespective of the money or wealth you can flaunt, marriage, we've seen, is much more that that.
Kazeem had a break which could change his business fortune, the bank is here to help the business ascend and likewise money but the relationship manager was not given enough time to understand the business and create consummation.
SUMMARY
Many cities are pregnant with opportunities, booming population, different challenges begging for solutions yet, these cities are full of scavenging loan predators who prey on financial institutions with sweet-looking proposals.
Business get support easily if you are well known to the financial institution.
1. Create a lasting relationship and not a quick, instant relationship
Be it a Microfinance Bank, Commercial Bank, Mortgage Bank or any financial institution that is in line with your business, creating a relationship is the best way of giving yourself an advantage to maximise opportunities that will surface later.
Business relationship includes
* Domiciliation of cashflow
2. Let your business have history
When you have a business whose history can be track/trace back to years of transactions, your business can be measure and this can be use to project what will come.
No business relationship officer will sit with your business daily or weekly but your daily business record will add credibility to your request.
Aside from receipt, record keeping softwares are available for download. These come with a price or free. Visit http://www.nchsoftware.com/software/business.html for list of free software.
3. Bankers are like Doctors, dont hide anything
It is funny when you approach a bank for a loan facility for a business and when you are ask what the business entails, you hide details so that the relationship officer/manager will not steal your idea/proposal.
But the same business manager will need to defend your request with the management for approval... what happens when questions on areas you hid are raised? How will the relationship manager answer the question(s)?
The truth is, bankers are exposed to an average of 1 business idea per day and there is no way they can so them all. and even if one of these business, yours, is implemented by the relationship manager, it can't be in the same location, or same target audience.
Many request are declined due to lack of proper analysis, credible cash-flow, dearth of adequate information for the relationship manager.
This may also be as a result of little or no information on the part of the Kazeems.
Next time, we will discuss more on Agriculture loan and why you need not seek for loan like many city-based farmers are doing.
Don Odedeyi Abiodun
Don Abiodun is an experienced business managerwith deep understanding of Microfinance industry.
Linkedin: Adiodun Odedeyi
email: abiodunodedeyi@gmail.com
facebook: Don Abiodun Odedeyi
Instagram @donabiodun
twitter: @donabiodun
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