Why African Entrepreneurs Struggle to Access Loans and Grants

"Why African Entrepreneurs Struggle to Access Loans and Grants" By Chidike Edmond

Chidike Edmond Ojuyenum
Founder & CEO, Nova Gate Limited 

When people ask me why entrepreneurs in Africa struggle to access loans and grants, I don't just hear a question — I relive a story. My story. Our story.

In 2022, I stood before a panel of investors at a business reality show. I was hopeful, dressed for success, and armed with a vision I believed in. But what met me was not applause or critique — it was silence. Cold, confusing silence.

Not because my idea lacked potential. But because I didn't know their language — the language of pitch decks, business models, and scalable metrics. I hadn't been taught. And they didn't bother to translate.

Later, I applied for a ₦3 million SME loan. Again, I believed I was ready. But I had no guide. No mentor. No knowledge of the paperwork maze ahead of me. I failed — not for lack of vision, but for lack of access.

And that's the African entrepreneurial experience for millions.

They're not failing because they're lazy.
They're failing because the system is coded — and nobody gives you the decoder.

The Hidden Barriers:

1. Collateral they don't have.
2. Business plans they were never taught to write.
3. Financial records no one showed them how to keep.
4. Application processes that assume insider knowledge.

It's like asking a fish to climb a tree — and blaming it for not flying.

But beyond the paperwork is the emotional toll.

After enough rejections, you stop questioning the system and start questioning yourself.

That's the real loss — the silent death of belief. ...and that is most dangerous path of an entrepreneurs road. Its scary to me. It should be scary to you and should make any system worried.

🔧 So What's the Way Forward?

To every entrepreneur listening or reading this: You are not the problem!

The system is. But here's how you can rise while the system fix it.

1. Start Small, But Start Smart

You don't always need ₦1 million. A well - managed ₦50,000 venture can teach you the business fundamentals no grant ever will. I will come hard on you and say; you don't need a loan/grant to start any business - you need grants and loans to scale a business.

2. Seek Knowledge Aggressively

Enroll to the University of YouTube, free webinars, business pages — consume them. Learn how to write proposals, track sales, and manage your numbers. You don't know much by yourself. Learn, unlearn, relearn and adapt. You are lucky you live in a generation where with almost zero knowledge gap is made possible with technology embrace it.

3. Find Your Tribe

Don't walk this journey alone. Join communities of other founders. There are people ahead of you willing to share maps. Build a team, build a community, get into a mentorship program. Build leverage - Its easier to get a N50m loan than it is to a N500,000 loan.

4. Document Everything

If it's not written, it doesn't exist. Record your income, expenses, inventory, customer data — because someday, someone will ask. These will make your book and your book is what speak for you. Your words or name is not yet credible enough to command "Trust". And this is personal to me too.

5. Families and Small Group Initiatives

Wealth is build from networks not individuals, and its best sustained through a well thought out succession plan. African families and small groups should become deliberate in wealth creation rather than focusing on individual strive. A simple thrift savings, crow funding program or "Osusu" as its popularly known can bridge the gap the system creates. The model must be deliberate and the objective must clear. In Africa, failure is communal and so should success.

And for the Policymakers and Financiers:

1. Simplify the process.
2. Remove the barriers that exclude grassroots entrepreneurs.
3. Introduce mentorship - driven financing models.
4. Replace rigid collateral with proof of work and track record.

Grants and loans should be bridges, not barriers.

📚 I am on a Book Project not just to share my losses — but to decode the system.
To show others that failure isn't the end. It's the beginning of understanding how the game is played.

Because in Africa, entrepreneurs don't lack dreams.
They lack systems that believe in them, back them, and Build Them.

And as long as we keep trying, keep learning, and keep showing up — we'll not only build businesses, we'll rewrite the rules.

We all have a near death experience (NDE) - i  going through mine and almost at the grasp of giving up, i was lucky to have been selected to be the trained by The Tony Elumelu Foundation (2025 Entrepreneurs Program) under the mentorship of "my elder brother", "My Daddy" (as i call him); Chaplain (Dr) Emmanuel Nembundah Tangumonkem (Chaplain ET). And the experience so far has reformed my thoughts and my approach towards business funding.

Your business might be less than a N50,000 revenue per month - its not too small, get a mentor, get your books up to date and its not too small to get started with regulatory compliance. Like Vusi Thembekwayo would advocate, "Start Small, Start Anyhow! If you want to own a diary farm, start by selling eggs".


Why African Entrepreneurs Will Struggle to Get Grants and Loans because:

1. Capital Illusion – Funds exist, but access is rigged.

2. Documentation Drought – No one taught us how to write the documents required.

3. Collateral Curse – Most young people simply don't own assets.

4. Credit Trap – No credit history? No deal.

5. Gatekeeping Game – Surnames and networks matter more than merit.

6. Interest Rate Inferno – Loans with 30%+ interest? That's not support. That's sabotage.

7. Language Barrier – Poor pitch, great business — still rejected.

8. Awareness Abyss – The grant existed. You just didn't hear about it.

9. Fraud Factor – Fear of scams keeps people from applying at all.

10. Psychological Toll – Repeated rejection kills belief — and businesses die before they're born.


🌍 If May Conclude:

Africa's entrepreneurs are not short of hustle.
They are short of access, empathy, and systems that meet them where they are.

But change starts with awareness. It grows through community.
And it wins through informed action and tenacity.


✅ If you found this valuable, let's connect with ideas that work. Tag a founder, policymaker, or financier. Let's have the conversations online.