NESG, Zedcast, Others Takes Action To Improve MSMEs in Nigeria

The Nigerian Economic Summit Group (NESG) in collaboration with Zedcrest group and other stakeholders says there is an urgent need to take action in ensuring that Micro, Small and Medium Enterprises have access to credit, improve financial inclusion and grow the financial sector for the Nigerian economy.

At the conference the stakeholders theme read, “Securing and enriching Nigerians at scale: Prosperity inclusion through financial sector innovation,”

They noted that such urgent steps must be taken to attract foreign direct investments to Nigeria and that about 40 per cent of Nigeria’s population live below the poverty line, with only four per cent of the 40 million MSMEs having access to credit.

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Dr Demola Sogunle, the NESG board member and the chief executive Officer at Stanbic IBTC Holdings Plc, Among the factors affecting the financial sector are lack of credit history, inability to keep proper financial records, non-realization of collateral, poor management strategies, stiff competition from larger corporates, and a limited business presence by micro-SMEs.

He believes that “there is a need to adopt partnerships that will drive mobile adoption and inclusive development. Development of credit infrastructure, creation of financial literacy programs, facilitate open banking initiatives for information sharing and collaboration to develop innovative financial products amongst stakeholders.”

He further provers solutions as online payment provisions, payment data to determine lending risks which can be obtained from smartphones.

That SME hubs should generate records on transactional activities and improved credit scoring in the rural areas, mainly where banking activities are limited and that businesses must strengthen their capital base to survive as an SME.

Additionally, he noted that it is crucial for the financial sector, through commercial banks, capital markets, and the insurance sector, to play a vital role in funding capital investments and not just providing industry loans concentrated in the oil and gas sector.

Lagos SME Boot camp convener Mr Ayo-Bankole Akintujoye, stressed the need to leverage, register, and provide credit and exposure to some clusters.

“Technology alone will not solve financial inclusion problems. We need to study the characteristics critically; leverage the clusters they respect and mobilize resources using the clusters as gatemen to reach the people at the end of the funnel,” he stated.

The executive commissioner for operations at the Securities and Exchange Commission (SEC) says proper financial education is essential, because for every 100 businesses funded, only five are expected to be profitable.

Adding that, there is a need to raise capital for structured firms with proper financial record keeping.