The Small and Medium Enterprises Development Agency of Nigeria has pinpointed high financial illiteracy and a deficiency in business management skills as primary factors contributing to the underperformance of Micro, Small, and Medium Enterprises in the country.
The Head of Corporate Affairs at SMEDAN, Moshood Lawal, shared insights with The PUNCH, emphasizing that the agency has identified significant issues with financial literacy and business management among Nigerian MSMEs.
Lawal’s comments come in response to a recent report by PwC Nigeria, which highlighted a troubling trend, 67 percent of MSMEs reported a drop in demand for their products over the past two years.
Lawal stated, “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 further acknowledged the challenges detailed in the PwC report, attributing them to the broader business environment and financial knowledge gaps.
In an effort to address these challenges, SMEDAN, under the leadership of Mr. Charles Odii, has introduced several initiatives.
These include a N5 billion partnership with Sterling Bank to provide MSMEs with credit at single-digit interest rates.
Additionally, the agency has launched a N4 billion matching fund aimed at MSMEs in Enugu, Abia, Katsina, and Imo States to enhance their global competitiveness and improve their access to funding opportunities.
The PwC Nigeria report surveyed over 500 MSMEs across 13 sectors, each with annual sales exceeding N5 million.
The report revealed that 38 per cent of businesses facing reduced demand attributed it to high product costs, while 36 percent cited low purchasing power and other factors.
The report also estimated that Nigerian MSMEs require approximately $32.2 billion, N13 trillion, in financing.
The National Vice President of the Nigerian Association of Small Scale Industrialists, Segun Kuti-George, reacted to the report by describing the situation as dire.
He expressed skepticism about the effectiveness of government interventions, noting that many business owners may not be benefiting from these measures.
Kuti-George 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.”
He urged the Federal Government to engage industry experts in the decision-making process, criticizing the complex and often discouraging nature of applying for government grants.
“We know who needs the grants more than the government,” Kuti-George added. “The process can be so tedious that sometimes you give up along the line.”
