MSMEs are considered the backbone of the Nigerian economy. In 2019, they made up 90% of all registered businesses, contributed more than 50% of the country’s nominal GDP, and employ 84% of its labour force. Despite this, MSMEs were the recipients of less than 5% of all credit granted by the banking industry.

One reason for this is self-selection by MSME owners. Many MSMEs refuse to apply for loans from banks due to a fear of rejection and a belief that banks charge exorbitant fees and request hefty collateral before giving loans to MSMEs. Now more than ever, in this era of cashflow-based lending and low-interest rates, this harmful myth is costing businesses access to finance that they need to scale.

Another reason is the MSMEs’ lack of loan readiness. Unlike large companies, small business owners do not prepare themselves before applying for loans. This causes them to make many mistakes that discourage banks from lending to them due to a fear of non-repayment.

In order to overcome this hurdle and join large businesses in taking advantage of the low-interest climate, MSMEs must take the following steps for loan readiness:

1. Maintain financial records – Research shows that 69% of MSMEs in Nigeria do not keep detailed financial records. As a business owner, you must ensure that funds pass through your business account. Your business’s financial records as reflected in your bank statement will help your bank determine your repayment capacity. This is important, whether you want a collateral-free or collateral-based loan.

2. Use narrations for transfer into personal accounts – Again, always use your business account for business funds. However, if funds must be paid into your personal account for any reason, then ensure that those payments have a narration that reflects the purpose of the payment. For example, Two shirts purchased. This helps isolate business funds from personal when computing your turnover in order to determine your loan amount and repayment capacity.

3. Know what you want – Always know exactly how much you want and what you want it for. If your account officer asks you how much you want and you say “any amount you can give me”, they automatically assume you have no plan for the money or a plan for repayment. Before approaching your bank, determine how much you need and how much you can repay per month, using your monthly income.

4. Have a repayment plan – Always have a plan for repayment. Know how much you can afford to part with per month. Note however that your repayment plan might not align with that of the bank. Banks prefer not to take more than 33% of your monthly income in loan repayments, so your loan repayment period will probably be dependent on how much you can pay per month. Regardless, a well-thought-out repayment plan will build confidence in your repayment ability.

5. Engage your account officer– It is important to have an engagement with your account officer before applying for the loan. Instead of just writing a loan application letter to the bank and waiting for a response. Armed with your financial statement and your knowledge of how much you need and for how long, visit your account officer and have them work with you in getting your loan.

Ese Atakpu is a writer and banker.

Saving money is hard. Period. This is a well-known fact. Despite the vast amount of information on ways and techniques to save money out there, 90% of people still struggle with it.

A large percentage of the working demographic live paycheck to paycheck. A huge chunk of this percentage is swimming in an ocean of debts. Avoiding calls and burning bridges, in a bid to save face.

When it comes to personal finance and savings, there are two foremost arguments

1. The Income argument
2. The Individual argument

The Income school of thought argues that for you to be able to save money, you must be earning enough. This means that the art of saving is largely dependent on the income earned.

The Individual argument postulates that if you can’t manage the little you earn, there is no guarantee you will be able to save when you start earning more. This means that the art of saving has more to do with the individual involved than the income in question

Whatever side of the argument you lean on, I believe you must have come across people who are simply just good with money. it seems to come naturally to them. They have so much control over their financial life that other people confidently entrust them with their own money.

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After a little bit of research, we want to quickly highlight 5 key habits usually found in individuals who are very good at saving money. There might be other factors, but these five habits are always present.

Delayed Gratification

Money smart individuals are not impulsive when it comes to spending money. Put in simple terms, they buy because they need and not because they want. They seem to defy the general rule of marketing which believes that human beings naturally make purchases based on emotions and not logic.

They are not lured by the appeal of big brands and most times go for products that will last a long while

Individuals who are good with saving money make a lot of sacrifices for the greater good ahead. They just don’t set saving goals, they have the discipline to achieve them.

They readily sacrifice the little joys of evening shawarma to make rent at the end of the year without going broke.

Delayed gratification is one key habit that is always present in individuals who are very good with money.

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Obsessed With Self Control

Individuals who are very good at saving money usually exhibit a high level of self-control in other areas of their life. A closer look will reveal that they portray the same meticulous approach they have with money in other areas of their lives.

Many were taught by their parents from an early stage, while some picked it up themselves while growing up.

Individuals who are good with money possess extraordinary willpower which keeps their human side in check. This helps them live below their means and always dredge up extra cash to save.

Big Record Keepers

Not many people know the exact amount they spent last month. It takes a meticulous individual who is obsessed with saving every penny to go that far.

Money smart individuals keep clear records of all their transactions. These records help them draw up a savings plan or goal.

Money smart individuals see shopping as a big occasion. They don’t trivialize the art of spending money as ordinary people do. They keep good records of all transactions made and always reflect on them.

They have a good knowledge of the numbers and can always tell when they are overspending.

Numbers are critical!

Every Penny Counts

Individuals who are good with saving money have equal respect for an N1000 note and an N20 note. To them, there is no difference between the two. They treat money as an entity and do not apportion importance based on value.

Ordinary folks see an N20 bill as easily expendable, Money smart individuals see the missing N80 to make it an N100.

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Huge Fan Of Investing

Money smart Individuals always have a knack for investing their savings. The major driving force behind their saving habits is usually the love for investing. You cant be a successful investor if you don’t have idle cash to invest.

Money smart individuals are fund of making long term bets. They enjoy the idea of watching their money yield more money. They are obsessed with it.

They are always fishing for the latest smart investment opportunities available.

Their saving ethics is usually driven by the fear of missing out on a very good investment opportunity.

There might be other contributing factors behind the reason why some people are better at saving money than others.

We believe the above reasons are the foremost

The Good news is most of these habits can be adopted by people who are eager to join the elite club of money-smart individuals.

Today is the best day to start!