As a Nigerian business owner, the demands of running a business can get overwhelming. The last thing you need to worry about is how you will pay your suppliers or fulfil that large order or request.
The first resort in these scenarios is usually to take from their personal savings or seek funds from family and friends. But these may limit your business’s growth potential or become an issue in relationships if the business fails.
Other ways businesses get funded are through financing from financial institutions, angel investment, and supply chain financing, among others.
The best source of funding typically depends on the needs of the business, stage of development, and financial history.
For businesses with a history of profitability and well-established supply chains who need working capital for their operations, there’s an alternative, more flexible, and affordable option to traditional financing – supply chain financing.
Supply chain financing gives you the funds you need to pay your suppliers and fulfil that large order or delivery to a customer, allowing you to grow your business without incurring excessive costs.
Nigerian businesses, especially SMEs, often have difficulty accessing traditional financing from banks because of the hassle of long documentation, collateral requirements, registration/application fees and unnecessary rules and regulations.
Streamlining supply chain financing involves improving the financial aspects of this process, which can include tasks like managing payments, reducing delays, ensuring liquidity, and making the flow of funds more efficient and cost-effective throughout the supply chain. This can lead to benefits such as cost savings, reduced working capital requirements, and enhanced collaboration between different partners in the supply chain. In the complex landscape of business financing, innovative solutions are needed to make a real difference.
One of the solutions that stands out for providing liquidity to businesses, enabling a seamless flow of the supply chain and business growth, is Shara.
Shara has a continuous credit financing model that ensures merchants always have enough resources and support. Shara’s continuous credit financing model is a unique approach to supply chain financing that provides merchants with a consistent flow of working capital to meet their supply and sales needs.
How the Shara Financing Model Works
Under Shara’s continuous credit financing model, merchants receive a pre-approved credit line that they can draw on as needed. Shara ensures that merchants always have enough resources to purchase goods from their suppliers and enough stock to sell to their customers. The steps to getting Shara supply chain financing are:
Merchant Approval: Merchants are vetted and approved by Shara to ensure their creditworthiness and business legitimacy. Merchants only need to do a one-time application and do not need to run any account/cash flow or savings with Shara.
Supplier Registration: Approved suppliers register with Shara via a weblink, providing essential information for transaction processing and approval.
Transaction Initiation: The merchant initiates a transaction by selecting the identified supplier, specifying the sale amount, and choosing the desired repayment period. The total amount to be repaid to Shara is determined by the selected repayment period.
Shara’s Approval: Shara reviews the transaction details and approves it based on the merchant’s creditworthiness, supplier’s standing, and transaction volume.
Supplier Payment: Upon approval, Shara disburses the agreed-upon sale amount directly to the approved supplier.
Merchant Repayment: The merchant repays Shara in instalments over the chosen repayment period. Repayment schedules and amounts are clearly outlined in the transaction details.
Continuous Access: Once the merchant has successfully re-paid the total amount, they gain access to Shara’s continuous credit facility, enabling them to initiate future transactions without the need for new registrations or applications.
Benefits of Shara’s Model
Shara’s continuous credit financing model offers several benefits over traditional supply chain financing models, including:
Simplicity: Shara provides access to funds with a quick turnaround time from application to disbursement of funds. Merchants do not need to deal with lengthy paperwork, unnecessary rules and regulations, having to get a collateral or guarantor.
Flexibility: Merchants can access funds as they need them without having to reapply each time they need the funding. Shara provides a one-time application. A merchant only pays as they use, i.e. if a merchant applies for N5 million, they use N2 million in the first month, N1 million in the second month and nothing in the third month; the merchant only pays interest on the N3 million used.
Transparency: There are no hidden charges for accessing funds from Shara. There are zero admin and registration fees; you only pay the interest on the funds used as a merchant.
Security: Aside from Shara’s recurring finance to merchants for a long period of time, Shara also verifies suppliers, which gives a guarantee to the merchants.
Who Can Benefit from Shara’s Model?
Shara’s continuous credit financing model is ideal for businesses of all sizes, including small and medium-sized enterprises (SMEs). The industries Shara caters to include Computing and phones, Fashion, FMCG Wholesale, Building Materials, Electronics, Autos and spare parts, Food & other perishables, General Goods, Agro-Allied, Health and beauty, Gas and energy, Services, Chemicals, Pharmaceutical, and Local Production, and are constantly seeking to provide business specific finance options to them according to their needs.
Shara provides financing options to various levels of the supply chain, from Digitised Enterprises, Non-Digitised Enterprises, Distributors, Dealers and sub-dealers, Large Retail Chains to Wholesalers.
To become eligible for Shara’s continuous credit financing, the business must have the following criteria:
The business must have a physical place of business (not shared with others).
The business must trade in tangible goods or have physical tools of trade.
The business must have proof of transactions on bank statements.
Shara finances businesses, however, these businesses are run by individuals, hence the need for certain criteria to get Shara’s financing.
The business owner must have a good credit history.
The business owner must not be older than 60 years old.
The business owner must have a government-issued identification card.
The business owner must have a BVN.
The business owner must not be a chronic gambler or investor in Forex or Crypto.
Merchants must provide a minimum of 6 months of bank statements to demonstrate their financial history and transaction patterns.
These criteria are designed to ensure that Shara’s financing is provided to financially sound merchants who operate legitimate businesses and are unlikely to engage in high-risk or illicit activities.
Shara offers numerous benefits to businesses through its Supply chain financing model. First, it is quick and easy to apply and get approved for funding.
The application process is straightforward, and you can expect to get approval between 48 hours and one week, depending on the technicality of the application. In addition, you do not need to visit any office, go through any interview phase or create and grow savings in any account before you get approved for funding.
Shara means business when it says they are delivering maximum value, injecting funds where businesses face problems in their supply chain, and delivering funding at the most affordable rates to the merchants.
Shara plays a significant role in streamlining supply chain financing and addressing cash flow gaps in businesses through its approach. In doing so, it also helps serious-minded businesses who may not have the required assets as collaterals to meet their financial needs and expand their business, thereby leading the charge towards a financially inclusive Nigeria.
Shara understands that different businesses have unique financial needs at different times. They provide recurring financing with a one-time application, which is unlike every other financial institution. With Shara’s one-time application, businesses can get constant access to funding without going through another application round, so long as they make on-time repayments and maintain a healthy financial record.
Ongoing Collaboration: Shara doesn’t just provide funds and leave businesses to their plans. They maintain an ongoing relationship with the businesses they support, allowing for continuous communication and collaboration to manage cash flow effectively. They do this by helping businesses with Business Development Managers who provide technical and business development support, such as conducting financial analysis to identify problems and growth areas and assisting with branding and market penetration support, among others.
Navigating the complexities of supply chain financing can be a discouraging task for businesses of all sizes. Traditional financing methods often involve lengthy processes, stringent eligibility criteria, and limited funding options. This can hinder businesses’ ability to access the working capital they need to maintain a smooth flow of goods and services.
By addressing the underlying challenges that plague Nigeria’s trade supply chain, Shara is empowering businesses to bridge cash flow gaps, unlock new opportunities, and contribute to the nation’s economic resurgence. Its ability to disburse over N2.5 billion monthly to various businesses across the supply chain is a testament to its impact and effectiveness. The good thing is there is still room for more.
Shara’s innovative approach to supply chain financing is empowering businesses to overcome the challenges of global commerce and achieve their goals. With its commitment to providing financial support and expertise, Shara is poised to transform the supply chain landscape and drive economic growth.
For more information and details about Shara’s offerings, check the Shara website or call 09030486624 to get started.
Streamlining Supply Chain Financing: Shara’s approach to cash flow gaps in business
