Thread:Financial Management in SMEs (3)

Thanks Naomy,

Knowledge about financial management is a key factor for business success, especially for youth entrepreneurs who are about to start a business. Lack of knowledge on financial management may result in young people starting their businesses without consideration of how much they require for funding their business ideas or where to get the funds, then they also may lack knowledge of how to be prudent in management of their resources when the business has started, especially when they may have obtained loans. Eventually the businesses may fail and they end up in debt, even when indicators arising from daily record keeping point to business failure, without knowledge of financial management, the youth entrepreneur may not be able to interpret these indicators and take appropriate action to save the business from failing.

The importance of financial management cannot be overemphasized and so the discussion paper has enlightened us on one of the major factors that may be responsible for young people’s inability to start and mange their businesses. In my own experience, how to source for finance by youth entrepreneurs is a major problem, because the opportunities for the youth is limited, for instance the conditions to access loans from banks are not youth friendly, because the youth are at an age where they have little or no collateral to give to banks and so young people depend on grants from government or other agencies or from family and friends.

Sources for Business Financing for young people are a major challenge, and so it will be helpful, if anyone can share ideas or options on business financing that can guide youth entrepreneurs during training sessions.