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Guidelines for advisors to facilitate
access to credit for micro and small enterprises
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The BDS facilitator
dealing with the business owner often is confronted with owner's
financial problems. In order to assess the real needs, it may be
useful to get an overview of the situation of the enterprise
concerned. What are the real causes for the "lack of finance"? The
decisive matter of financing should be the
market situation
of the enterprises. If the operator meets problems in sales and
clients, the facilitator should be hesitating to recommend credit
activities. In general a micro or small enterprise with market
problems may not be easily able to use the credit in a profitable
manner.
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If the entreprise meets a
shortage in investment, equipment, raw materials or wants to extend
his enterprise by a normal or good sales situation, credit measures
may be considered.
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In that case a analysis of
the business situation and an analysis of the business projects should
be undertaken by writing a business plan.
The business plan should be written by the business owner himself
assisted by the BDS facilitator or a professional BDS provider.
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At the same time the
operator should be urged to open a savings account and to
strengthen his savings. Because proper funds are a good condition for
a succesful loan application procedure.
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Simultaneous to this
preparations on business level, information on bank or micro-finance
level should be obtained. What are the adapted finance institutions
for this kind of business? What are the loan application conditions?
Individual or group collataral? Ceiling? The interest rates? Repayment
period and conditions? Grace period?
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Finally, get the loan
application form.
Checklist: What Finance do I need?
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What do I want to finance?
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Specify the exact item and think
through what else may be needed to make the investment work! |
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Do I need finance only once or
regularly? |
If you need it only once, you
require a fixed investment loan. If you need it regularly, your
require a working capital loan. |
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How much do I need?
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Get price information in the
market to know what your investment will cost you! Think about your
liquidity and whether you need working capital as well!
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How much do I have myself?
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If you want to get a loan, the
bank expects you to make an investment from your own resources as
well. Calculate how much you can contribute! |
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For how long do I need Finance?
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The bank wants to know
when will you repay?! So, calculate your profits from the investment
and how long you will need for repayment. |
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If you do not know how your
credit / investment will generate profit, you may have a different
problem – not financing! |
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Do I need finance because my
customers do not pay? |
You have a liquidity problem.
You should not try to get a loan, but make your customers pay you!
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Do I need finance because my
sales are low recently? |
If you do not plan to invest the
money, how can you repay? Think of how increasing your sales (e.g.
marketing) instead of getting a loan! |
Three steps for Finance
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Financial Analysis:
www.start-your-business.net/financial-analysis.html
causes for lack of finance, financial needs, loan requirements,
financing conditions
Financing your
Business:
www.start-your-business.net/financing.html
sources of start-up capital, own funds, loans, institutions
Follow-up of
Finance: consider repayment schedule
www.start-your-business.net/follow-up-financing.html
All about Finance in
Ethiopia
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www.bds-ethiopia.net/finance/index.html
Loan conditions of commercial banks and
micro-finance institutions, laws and regulations
All about Finance
in Ghana
www.ghanabusiness.org/finance.htm
Requirements, business registration and
license, financial records, repayment capacity, securities, loan
application procedures, guarantees, financial institutions
Handbooks for download
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Euro Info Center
Accès au Financements pour les Entreprises technologiques - Guide
pratique
guide-au-financements.pdf 250 Ko
EBDSN, Addis 2004
Loan conditions of
Commercial Banks
and Micro Finance Institutions in Ethiopia
loan-conditions-23-02-04.pdf
468 KB
Ghanabusiness, Accra 2006
Financing your Business
financing-your-business.doc 485 KB
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New BDS Portal in Senegal
www.senegal-entreprises.net .
One of the biggest national BDS portals world wide!
Value Chain Development in Ethiopia
www.business-ethiopia.com |
Radio mechanics
Tozeur, Tunisia
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