4 months ago
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The Small and Medium Enterprises Development Agency of Nigeria has attributed the underperformance of Micro, Small and Medium Enterprises to high financial illiteracy and a lack of business managerial skills.
SMEDAN’s Head of Corporate Affairs, Moshood Lawal, told The PUNCH that the agency was aware of the reported decline in MSMEs’ performance, which was a consequence of the country’s business environment and financial illiteracy.
“What we discovered at SMEDAN is a high rate of financial illiteracy and business managerial skills among the nano, small and medium businesses in Nigeria,” he stated.
Lawal’s statement was a reaction to a report by an audit and advisory firm, PwC Nigeria, which showed that 67 per cent of MSMEs in Nigeria experienced a decline in demand for their products in the last two years.
He noted that SMEDAN worked to solve the challenges faced by small business owners, saying, “The agency, under the leadership of Mr Charles Odii, is completely aware of these challenges highlighted.
“The Federal Government, through the agency, has made available N5bn SMEDAN Sterling Bank partnership to provide credit to MSMEs at a single-digit interest rate.”
He added that the SMEDAN matching fund of N4bn for MSMEs in Enugu, Abia, Katsina and Imo States was another intervention by the agency to make MSMEs globally competitive and equipped to apply for available funding opportunities.
According to the PwC Nigeria report, which surveyed over 500 MSMEs across 13 sectors of the Nigerian economy with an annual sales turnover of N5m and above, 38 per cent of MSMEs that reported a decrease in demand for their products pointed to the high cost of products, while another 36 per cent said it was due to low purchasing power and others.
The report stated that Nigerian MSMEs required an estimated $32.2bn (N13tn) in financing.
The National Vice President of the Nigerian Association of Small Scale Industrialists, Segun Kuti-George, said the findings of the PwC Nigeria report “painted a gloomy picture”.
According to Kuti-George, the report reflects the situation of small business owners.
He told The PUNCH that while the small-scale industrialists association had seen interventions from the Federal Government, it was not fully convinced that many affected business owners were being impacted.
He said: “I don’t think many of our people are accessing the interventions by the government. The money we get at all is nothing, to be honest.”
The NASSI national vice president urged the Federal Government to involve industry players in its decision-making process as he worried that the process of receiving government grants was tedious.
“We know who needs the grants more than the government,” Kuti-George said. “The process can be so tedious that sometimes you give up along the line.”
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