Effective Financing Strategies for Small and Medium Enterprises in Sub-Saharan Africa

Limited access to finance is a significant cause of failure of small and medium enterprises (SMEs), impeding their ability to reach their full potential and contributing to a high business failure rate, a significant concern of SME leaders. Grounded in resource-based theory, the purpose of this qualitative case study was to identify and explore effective financial strategies some sub-Saharan African SME leaders use to access capital to grow and sustain their business beyond 5 years. The participants were eight SME owners in Lagos, Nigeria, who effectively used financial strategies to grow and sustain their businesses over 5 years. Data were collected using semistructured interviews and a review of available company documents. Eight themes emerged from the thematic analysis: (a) challenges getting funds for SMEs, (b) strategies to overcome financial challenges, (c) indicators for choice of financial strategy, (d) most preferred strategy to overcome financial challenges, (e) challenges implementing chosen strategy beyond 5 years, (f) financial strategies that did not work, (g) needed documentations to access funds, and (h) suggested practices to sustain SMEs financially over 5 years. A key recommendation is for start-up SME owners to secure alternative capital sources like personal assets, families, friends, and other third-party options. The implications for positive social change include the potential for SME leaders to create jobs, increase incomes, build strong communities, and ultimately contribute to poverty reduction and economic growth, improving the quality of life for millions of people.