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How to Start a Finance Company in Nigeria

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How for Start A Finance Business In Nigeria

Starting a finance company in Nigeria can prove to be worth the effort, if all necessary precautions are taken. The industry allows for flexibility in running businesses, provides financial assistance to other industries and still permits owners and shareholders to make money.

In order to record success in the finance industry, investors must lay a solid working foundation that will parachute growth and ensure stable inflow of cash.

In African countries, the finance industry can be promising for finance company start-ups. The manner of registration for finance company start-ups can vary greatly depending on the country of location, and on the kind of financial business operations they would like to set up.

For this reason, it is advised that investors seek financial business counsel from fiance law firms or lawyers conversant with the operations of the finance industry. These lawyers can provide support, information and legal backing necessary for setting up such businesses in a particular location.

Finance companies provide financial services and loans to various categories of customers. They serve retailers, small, medium and large scale businesses, support start-ups and help them remain in business, and provide personal, home equity, car or student loans.

Apart from an outstanding understanding of customer and market demand, and clear product line, a solid business plan targeted at success must be in place for finance companies to do well.

In addition to the above, finance companies must strictly comply with the specifics of the particular location: federal and state government requirements, including compulsory minimum funding before starting.

How for Start A Finance Business In Nigeria

How for Start A Finance Business In Nigeria

Below I will discuss things that should be considered when setting up a finance business. It can be applied to other types of businesses as well.

Understand the Business Thoroughly

Know thyself. Before starting your business and career in finance management and service provision, it is essential to assess your capabilities, strengths and weakness, obstacles and possible challenges. Take note of all the steps and approaches you can put in place to help you run your business smoothly.

For example you should be able to answer these questions before you start the business:

What financial management skills do you have?

  1. Do you have any professional certifications (including those in financing and accounting)?
  2. How about people management and leadership skills? Do you have them?
  3. Do you have the required soft skills to handle the business environment?
  4. Are you a problem solver?
  5. Can you make quick, accurate and efficient decisions when the need arises?

Answer these questions honestly and make your decision from there.

Decide On What Your Finance Company Would Be Specializing In

A finance company would generally provide loan services to a target populace. But then, there are different categories of loans and financial secuties out there. So, you must decide on what exactly it is that you want to specialize in. That is, you must decide on the exact kind of loan that your finance company would be giving the public.

This specialization would determine the marketing, financial, and operational requirements of your proposed company. The chosen niche should be picked based on knowledge, interests, experience, and expected success.

Do not be a Jack of one trade, master of none. The ability to focus on your chosen specialty is a recipe for success in the creation and growth of your business in the finance sector.

I will discuss market survey when I talk about check the viability of the business. Now, if your market survey shows that there is a growing number of start-ups needing money to finance their businesses, it is a good pointer that starting a finance company in such a region could be a lucrative venture to do.

So, you would/should determine how your finance company and its products can assist your target market in growing their businesses, bring you more clients and serve both of your interests.

Check The Viability Of The Business

You want to start something that will bring in customers consistently and generate profit at the same time. Because of this, it is important that you carry out a thorough market research to know where you can fit in, if you fit in, how much competition is there already, and how would you face these competitors, if any.

Your survey should be able to state how big (or small) the market is, what products and services other companies provide which are similar to or the same as yours, what geographical location(s) you and your competitors will be serving, your potential customers, their needs and how to help solve their problems, as well as price and price stability (or fluctuation).

Recognize The Business Requirements

Find answers to the WHYs and HOWs of your business.

Beyond this, you would need an office space, office equipment, electricity, electronics, hire different categories of staff, and pay them their salaries and wages.

Also note that there are the day-to-day office operations to be carried out by clerks, marketers, accounts, credit officers and guarantors. So, you need to clearly identify each personnel’s role and contribution to the growth of your finance company on a day-to-day basis.

Finally, you need to decide how you will provide your services and how you would promote the business offline and online using the internet and social media.

Calculate And Summarize The Numbers

The finance business is a number business. Clearly write down the amount of capital you need, including registration fees, location, and logistics, and how much you’re going to possibly make per customer or transaction.

Check for profitability. Ensure that you can make profit from this business before your risk you and other investors’ capital.

Set Up Your Business Plan

A business plan is the bedrock of a business. It is the foundation upon which every other activity in the company is carried out. A documented plan for this business would provide your business with a direction for establishment, growth, sales, focus, and customer, investors, lenders and staff relations.

Take everything into note when writing your finance company business plan. State exactly what your goals are and the steps you need to take to achieve them. State also how your business would get funding, when you want to launch your products into the market, and any other plan for growth and expansion.

Compose A Business Description

Your business description should include an outline of your company’s overall structure, services provided, clients to be served, and aims and objectives.

Indicate why clients need you and should buy your products, why you’re a valuable addition to the market in that sector, and who your customers are. It can also include your products and their descriptions, your target customers, a clear line of marketing action, and a mode of communication with potential customers.

Portray Your Product Line

State clearly the exact financial products, loans and services your company offers. Tell people how these products are good for them and why they should consult you when they’re in need of those services. Tell them how their needs can be met by the products that your company offers.

For instance, if you have an SMEs support product, let them know how the loan services you provide can be of help to them and their businesses.

Document Your Marketing And Sales Marketing Strategy

Keep records of how you want to sell and market your products, including the strategies and funds for these. Your company’s sales strategies should explicitly show how you intend to attract customers, clients, lenders and depositors, the blueprint for your company’s growth, and the details of product marketing.

Advertising, public relations, fliers and social media ads should be incorporated in the promotional and ad strategies. It can also include details about your marketing team, their goals and methods of reaching the sales goals.

Source Funds For The Business

  1. Shareholders’ Funds Borrowing: Here the company borrows money from members of the public, other corporate and financial organisations, and banks.
  2. Securities: This type of fund is gotten from debentures or investment notes, SME funds and commercial papers.

Obtain The Required Operational Licenses And Permits

For a finance institution to be registered and approved to operate in Nigeria, the following details must be submitted with a written application to the Central Bank of Nigeria:

  1. A ₦100,000 (one hundred thousand naira) application fee paid to the Central Bank of Nigeria.
  2. An initial draft deposit of at least 100,000,000 (one hundred million naira) in the Central Bank of Nigeria.
  3. An evidence of payment of the above.
  4. A comprehensive business plan or feasibility study.
  5. A draft copy of the company’s Memorandum and Articles of Association.
  6. A signed letter of intent by the shareholders to subscribe to the finance company.
  7. A tabular list of intending or proposed shareholders including their names, businesses/occupations, home address, and bankers’ information.
  8. Names and curriculum vitae of all proposed members of the Board of Directors including their former directorship positions and signatures.

Once granted an operating licence, the financial institution can then register its business with the Corporate Affairs Commission (CAC). For this registration, the following are needed:

  1. Notice of business approval (Availability Form)
  2. CAC application form (1.1)
  3. Memorandum and Articles of Association
  4. Evidence of Stamp Duty payment.
  5. Approval in Principle from CBN
  6. Payment receipt of the CAC charges
  7. Identity card of shareholders, directors and company secretary.

Note: The shareholding of a company must be up to the minimum share capital for finance institutions, and their objectives must be in agreement with those of a financial company.

Corporate Affairs Commission will surely register any company that meets their registration requirements.

Conclusion

It is well-known that there are no businesses without risks. In fact, businesses themselves are risks that people take. That being said, the risks people take in running businesses can provide fruitful results if the right things are put in the right places.

Follow and seek legal advice, do a thorough market survey or analysis, and put a good plan in place. If all these things are done well, it is very likely that your business will do well for you in the long run.

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Ekemini Ekpo is a professional writer, blogger, and internet marketer. He is passionate about engineering, business, investment, entrepreneurship, finance, and personal development. When he is not managing web projects, he handles academic research writing and data analysis for individuals and organizations.

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What is Cryptocurrency And How Does It Work? 

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Obiex finance website

Cryptocurrencies are decentralized digital assets that operate on blockchain technology that in turn operates by storing a ledger of every transaction on all nodes powering the blockchain. 

In layman’s terms, blockchain technology is like a record keeper, it collects data (in blocks) and links one block of data to another, forming a chain. The data on the blockchain is open for all to see and cannot be easily altered. Blockchain technology can be used for a variety of use cases besides cryptocurrency, ranging from voting to crowdfunding, keeping health records, etc.

Using Bitcoin as an example, nodes are computers connected to the network to mine Bitcoin,  – this collection of independent nodes working together is what makes the network decentralized.

The decentralized nature of cryptocurrency is down to the creators recognizing flaws in traditional banking & financial systems like governments and financial institutions acting only in their best interests and not in the best interest of the common man, leading Satoshi Nakamoto (the creator of bitcoin and blockchain technology) to take steps to rectify that.

Related: What are NFTs?

To make cryptocurrency transactions, you will need to have a set of both public and private keys that will act as passwords protecting your crypto wallet. 

The Public key is connected to your wallet address, allowing you to share the address with others to receive cryptocurrency, while the private key is known to only you and is what you will use to approve outgoing crypto transactions from your wallet. 

Trading Cryptocurrency on Obiex

Obiex finance website

With the popularity of cryptocurrency trading currently at an all-time high, the biggest challenge for many rookie traders is selecting which cryptocurrency exchange to trade on.

If you fall in this category, the immediate priority should be finding an exchange that allows rookie traders to make trades easily, doesn’t charge extra fees and is completely secure. That exchange is Obiex Finance.

In this guide, you will be shown how to navigate the Obiex mobile app & website easily and what to do to get started with making cryptocurrency trades. 

Getting started with Obiex Finance 

Obiex Finance is a digital asset exchange and financial technology (Fintech) platform that gives its users the ability to easily execute cryptocurrency trades from anywhere regardless of their skill level.

Their commitment to ensuring that users get the best experience is shown in how they allow instant swaps from volatile coins like Bitcoin to stable coins like USDT, and vice versa, without confirmations. In a market where the value of crypto can fluctuate wildly, this feature is especially valuable as it allows users to seamlessly switch between making profits to saving those profits in a more stable currency before the value drops.  

To create an Obiex Finance account, simply head over to their homepage, click on “sign up”, fill in the required fields and verify your email address. After that, create wallet addresses for your crypto assets and you’re ready to start trading!

The cryptocurrency available for trading on the Obiex Finance platform are: Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), Polygon (MATIC), Dogecoin (DOGE), Tether (USDT), Binance USD (BUSD), and USD Coin (USDC).

Getting Started with Cryptocurrency trading

After creating your Obiex account, you need to follow these simple steps:

  1.     Have a Trading Strategy: Trading cryptocurrency without having a strategy in place is the easiest way to lose your money. You will need to research the various crypto trading strategies thoroughly and choose the one that best suits your needs and temperament. For example, if you’re a patient person who is content to make smaller, safer trades over a long period of time instead of making riskier trades, then scalp trading is the best trading strategy for you. There are also other crypto trading strategies such as Swing trading, position trading, Arbitrage, dollar cost averaging etc.
  2.     Pick the cryptocurrency you’d like to trade: There are several cryptocurrencies available on Obiex Finance such as Bitcoin, Ethereum, Binance Coin, Tether etc. Selecting which cryptocurrency to trade is usually down to making a choice; whether to stick with the safer, more established cryptocurrencies like Bitcoin or to go with the more volatile coins that have a high upside and an equally high-risk factor like the Dogecoin which can move in either direction based on what Elon Musk tweets.

It is also important to note that when you pick a cryptocurrency to trade, it would be wise to ensure that the cryptocurrency matches the strategy you pick. For example, if your preferred strategy is patient scalp trading, then investing in volatile coins that have a high upside but carry a lot of risk is not the wisest move. 

To swap crypto on Obiex Finance, add the wallet of crypto assets you’d like to swap, send the crypto to the wallet you just created, navigate to the ‘swap’ option on your dashboard, and select the coins you’d like to swap. You will receive the swapped coin in your wallet balance immediately without waiting for network confirmations.

  1.     Securely store your cryptocurrency: The same way you’d protect your goods and profits if you had a physical store is the same way you need to protect your cryptocurrency so it doesn’t fall into the wrong hands.

You can store your crypto securely on your Obiex wallet but if you want an alternative, physical wallets are also an option. Physical wallets allow you to store your crypto in secure hardware, offline storage device reducing the likelihood of online hackers stealing your hard-earned crypto. This is a list of reliable physical wallets you can use.

Conclusion

If you’re a newbie to crypto trading, the keyword is patience. Taking the time to properly understand the market before making trades will stand you in good stead. While risks occasionally pay off, a patient, long-term strategy is required to make consistent profits. For more information about trading as a newbie, you can check this out to understand unfamiliar crypto terms and to learn more about spot trading and futures.

Obiex Frequently Asked Questions | Obiex FAQs

  • Will I be charged a fee when I swap coins on Obiex? 

No you won’t. While other crypto exchanges charge for trades and require confirmations to execute swaps, Obiex allows you to make free, instantaneous swaps without the delay that comes with waiting for confirmation. This also helps you avoid unnecessary losses.

  • Can I trade crypto on Obiex if I don’t know much about crypto? 

Yes, you can! The Obiex Finance platform allows both rookie and experienced traders to make easy, safe trades regardless of trading experience.

  • Can I send and receive crypto easily?  

Yes, you can. To send crypto, you will use your private key to execute outgoing trades and your public key/your wallet address to receive incoming trades. You can also send and receive crypto using just Obiex usernames.

  • Why do I need to swap coins? 

Swapping coins allows you to either acquire a coin you think is (currently) more valuable than a coin you have a lot of. You can also use swaps to ensure that your funds are invested in a more secure coin like USDT if you feel the volatile coin you’re holding is about to go on a bear run and lose value.

  • Do I get a referral bonus when I invite friends to use Obiex? 

Yes, Obiex has a referral campaign that rewards users that invite their friends and family to trade the minimum of $10 on Obiex.

 

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