Every business in Nigeria needs a certain amount of money to start. Every entrepreneur when planning a new business, has to work out where and how he will get access to sufficient funds to run the business.

The first organization that he thinks of is a  financial institution. Yes  financial institutions are almost always one of the first organizations to be approached for funds in the form of a loan. It is here that harsh realities hit the entrepreneur who soon learns how difficult it is to get a  financial institution loan to finance his small business venture. A select fortunate few, do manage to fulfill all the pre-requisites for a loan, and are successful in procuring them. But for every successful loan application there are many that get rejected. The tough regulations linked to loans are gradually undergoing a change with  financial institutions realizing the phenomenal potential of small businesses. This explains the special programs and additional services launched big  financial institutions to woo small businesses.


thrift firm loans are just one of the various options available for small businesses to raise funds. The final decision about where to secure funds depends on the balance between the pros and cons of the source. Like all other funding sources,  thrift firms loans also come with their share of advantages and disadvantages.

 Thrift Firm Loans for Small Business


  • Convenient and accessible–  thrift firms are always accessible since they are used regularly for depositing savings or withdrawing them. After being a thrift firm customers for years, the firm becomes convenient and familiar, and personalized service makes it the first place to consider for a loan.
  • Multiple Loan options– All thrift firms advertise various types of schemes to woo entrepreneurs setting up or running a business. The real earnings for a thrift firm come from the interest they charge on these loans. Options like term loans, standard business loans and others are available for the entrepreneur.
  • Non profit sharing– Venture capitalists and angel investors agree to provide a loan in exchange for part ownership, the right to influence decision making and a share of the profits. thrift firms do not ask for any of these. If they do sanction a loan, they are only interested in getting their interest and partial loan payment installments.
  • Lower rates of interest-Though tough to get, thrift firms  provide loans at lower rates of interest than other lending agencies and instruments.
  • Bank loans offer tax benefits– Small businesses taking loans from thrift firms enjoy some relief from tax, since the percentage of profits used to repay the loan is exempted from tax.
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It is these advantages that prompt entrepreneurs to approach thrift firms for one of the various loans offered.


However, as mentioned before, getting a loan is not easy, and its disadvantages include:

  • Lengthy application process– thrift firms need to verify all the credentials and details about the business before sanctioning a loan. Therefore its application process is very long and its review etc. takes a long time.
  • Cumbersome– The prospect of getting into the detailing that thrift firms require is really cumbersome, and from the entrepreneur’s point of view, totally unnecessary.
  • Preference given to existing, running businesses– thrift firms prefer running businesses because they can gauge its profitability and credit history before sanctioning the loan.
  • Long list of prerequisites to qualify for the loan– thrift firms have long list of conditions that a business should fulfill before they clear the loan. It is sometimes not possible to meet all of them.
  • Risk of losing Collateral– thrift firms loans are generally sanctioned against some collateral, often the entrepreneur’s house and property. This stands the risk of being lost to the thrift firm should the business fail to take off.
  • Entire amount not granted– thrift firms are known to not agree to grant the whole amount requested for a loan. They may grant 70 or 80 % of the sum applied for. This makes it difficult for the entrepreneur to begin since he has to scout around for the remaining balance and find agencies to funds that before he can start.
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Thus it is the balance between these advantages and disadvantages that prompt people to approach thrift firms for small business loans. While raising funds is an essential part of business, so too is budgeting and having someone in the business with a keen eye on keep costs under control and within budget. We at  PETJOA GLOBAL INVESTMENT LIMITED lends money to bankers and professional bodies (salary earners), We also lend money to non bankers and non salary earners, like business people with static salary date, to help enhance the standard of living in Nigeria and provide business financial needs.  

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