When most of us hear about funding, large investment banks and venture capitalists come to mind. They remain one of the most preferred choices for start-ups. Yet, they may not be suitable for every business enterprise. Venture capitalists invest a massive amount of money at a larger risk. It may be appropriate for the enterprises looking to scale soon in the future. But, small or medium enterprises, may only need some amount of funds. With this, they can go about with a vertical expansion while not compromising on their local reach.
Although there is something that is often observed when many small businesses receive adequate funding. They also consider share capital or venture capital. But, to maintain linear growth, private funding is the best option for such businesses. Private funding, according to business studies, refers to the funding received by small businesses. It might also include some medium-sized businesses.
There are many kinds of private funding options, including bank loans, crowdfunding, etc.
Apart from this, personal financing and taking money from your friends would also fall under this. Due to low risk and quick funding, it is becoming popular.
Now let’s come to understand if private funding can help save the African retail market. It is well known that the COVID-19 pandemic has hit each country in the world. No international or domestic market has denied its implications. In such circumstances, the almost blooming business in African retail has again come to a standstill.
Can Private Funding Help the African Retail?
If we study the background of the African market, one can easily point out that the Government has not given its best. The poor growth of the African market is primarily because of a lack of political will and policies. But, even as the southern countries have been doing good business each year, the pandemic has pushed them back.
In many countries like Kenya and Eastern Africa, retail stores are being shut. This is not only a large hit on the economy but also employment. To curb these threats, it is important to revive the economy. This is certainly possible with private funding. With a target market of local Africans, the retail stores and chains can start gaining capital. With private funding, there would be a lesser amount of risk and more autonomy. Investors would not demand a share in the company or store. This way, private funding can help them employ more Africans and help the Government improve relations. With further collaboration in the African countries, trade and commerce can become easy. One can observe that when the European Union came into existence. In the next decade, entire Europe became more valuable and financially strong.
Hence, private funding can indeed save African retail. Although some risk continues to exist, one cannot deny its possibility. With more funds in the local market, African countries can improve their international trade via sea. With an easy market in Asia and America, it can even open its market for foreign investment in the future.