Where do you get funding for a business venture?
You might start with the banks but they can be conservative, perhaps a little closed-minded. They won't often share your vision.
Then there are the riskier options.
Companies like "Africa Funders". We warned people about this company, who described themselves as “Africa’s biggest online lending platform”, in 2017, saying that we felt they were a bit too suspicious to be trusted.
They offered a strange business model. They said that we “Can work with them by either: Becoming a funder, Applying for funding” and that “60,000+ Personal and Businesses Borrowers Network that has engaged with us in last 5 years”, that "$10,000,000+ loan/deal values funded” and “220+ Business deals/loans funded”.
We recently heard from one person had invested “P11,383.00 with Africa Funders in 2017" and that " the particular investment was to yield 10% profit. Then we were only paid P3127.” Despite subsequent promises, nothing came forth. They told me that:
“Last year which was 2018 we went there only to find that their offices have moved and no one has any idea where they have gone. None of their contact lines work. We don't know where to get hold of them and it seems that they have packed and left with a lot of people's money.”Another victim contacted us saying:
“We sold them shares in our business. They then took over the running of the business. They took over all the paperwork and any sales made were paid directly into their business account. We later found out (when wages etc couldn’t be paid) that they would change the invoice and the customers were informed to pay into their company account. This left no money in our account to cover any running costs of the business. The staff took us to labour, as we were the management of the company. We are still busy paying off debt. We took them to court and won the case, but the deputy sheriff has never been able to locate them to serve the final court order.”2. Another potential funder
Here's a similar story. Maybe you can get funding from another company (which will remain nameless for now). We were told that after a joining fee of P2,000 you can be offered a:
“package up to P600 000. The loan is payable in 5 years. You are given a period of 5 years to clear it up. [The company] will be doing production with you all the way, trainings and mentorship.”However, in return for this, the company “Takes 2.5% commission from your net profit” and
“The company will be signatories to the business account. This is to monitor the use of finances. There is no how we can use money without your approval, the same as you, you cannot take money without us approving it. This is where we will know how much you made and how much net profit you made where a 2.5 % commission will come from.”In effect, “they will be controlling everything in the business”.
Be cautious. Be very cautious.
3. The Regulators
Who are the regulators and what are they doing?
BOCRA. They cover communications, telecoms, TV, internet access. Look at the legal action they took in recent times against certain suppliers.
Bank of Botswana. They cover banks, Bureaux de Change, money transfer schemes. The banks are reasonably well-behaved but are we seeing enough from them?
Botswana Bureau of Standards. Filling stations, Weights and Measures, new tyres, bottled water, domestic electrical items, there's a long list of products they regulate. As you read this there's probably a BOBS specialist out there testing something, helping to protect you and me.
NBFIRA. They might even have too much to do. They cover microlenders, insurance companies (including brokers and agents), pension schemes, investment and financial advisors, the list goes on.
The Botswana Medicines Regulatory Authority (BOMRA). They cover medicines (having recently taken over from the Drug Regulatory Unit in the Ministry of Health and Wellness) and cosmetics. A very good start but do we really want the Shampoo Police?
The MITI CPU (say it out loud). The Consumer Protection Unit in the Ministry of Investment, Trade and Industry. Soon to be Competition and Consumer Authority (once it merges with the Competition Authority) and responsible for enforcing the 2018 Consumer Protection Act.
What do all of this regulators have in common? They all need us. They can't be everywhere but we can be. They need us to make complaints to shout about abuse, to make as much noise as possible so they can do their job.