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 capital, warning that dependence on conventional loans could expose businesses to financial distress.
She said entrepreneurs must match their financing choices with their operational needs, cash flow, repayment capacity and growth ambitions rather than regard borrowing as the default solution to funding challenges.
Akinjayeju spoke 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 (CLSME) Bootcamp, held in Lagos.
The session featured Feyisayo Alayande, Executive Secretary of the Lagos State Employment Trust Fund (LSETF), and Ikechi Onyeneke, Head of Business Development, Enterprise Banking, Stanbic IBTC Bank. It was moderated by the bootcamp convener, Ayo Bankole Akintujoye.
Drawing on EFInA’s A2F 2026 insights, Akinjayeju disclosed that only about 10 per cent of Nigerians had accessed formal credit, underscoring the need to expand access to suitable financing and improve entrepreneurs’ understanding of available funding options.
She cautioned that borrowing without a clear repayment plan could accelerate business failure, particularly where debt obligations exceed the cash flow a business can generate.
“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.
She outlined three considerations for SMEs seeking funding: purpose, proof and partners.
Purpose requires entrepreneurs to establish what the funding will achieve, while proof involves demonstrating business capacity through credible financial records, cash flow evidence, repeat customer orders and a track record of fulfilling commitments. Partners include customers, suppliers, investors and business associates who can provide funding or facilitate access to capital.
Introducing the mnemonic CAPITAL, Akinjayeju identified seven financing alternatives beyond conventional loans: Customer Advances and deposit-backed pre-orders; Asset Leasing; Payables and Supplier Credit; Invoice Financing; Third-Party Equity Investments; Awards and Grants; and Leveraged Group Financing through cooperatives.
She explained that these options could help businesses access working capital, equipment and expansion funds without necessarily taking traditional bank loans.
However, she stressed that no single financing option would suit every business, urging entrepreneurs to consider their business stage, funding requirements and the obligations attached to each source.
She also advised SMEs to build relationships with potential financiers, customers and suppliers before needing financial assistance, noting that trust, reliable delivery and sound business practices could improve access to funding.
Akintujoye said the discussion was designed to help entrepreneurs examine whether lack of capital was truly their biggest constraint and understand the financing options available to them.
The CLSME Bootcamp, a non-profit initiative focused on strengthening entrepreneurs’ management, leadership and execution capabilities, has directly impacted more than 10,000 SMEs across its first eight editions.
Its ninth edition attracted over 1,500 physical participants, with another 2,000 expected to participate virtually from across Africa.
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