Tag: MSMEs

The Federal Government has commenced the disbursement of N75 billion single digit loan to Micro, Small and Medium Enterprises (MSMEs) through the Bank of Industry (BoI).

Senior Special Assistant to the President on Job Creation and MSMEs, Mr. Tola Adekunle-Johnson, broke the news in Abuja at a nationwide town hall meeting to sensitise MSMEs to the Presidential Grant and Loan Scheme.

Adekunle-Johnson explained that the town hall meeting was going on simultaneously in Ogun, Bauchi, Enugu and Kaduna states with a view to educate MSMEs on the conditions for accessing the loan.

He said: “We are live in Ogun, Bauchi, Enugu, Kaduna states simultaneously. In 2023 President Bola Tinubu approved some funds as palliative to cushion the effects of subsidy removal.

“We are here today to sensitise MSMEs to the loan which is currently open all over the country.

“MSMEs can work into any Bank of Industry from today and apply for this loan. It is a single digit loan, it is nine per cent, it is fixed, no hidden charges.

Read Also: Lagos gets seven Police commissioners in seven years

“This is the one and only single digit loan you can get and you can get up to N1 million.

“It is important for us to sensitise the people to this facility so that they don’t fall into the hands of people that will tell them to bring money before they can access it.”

The presidential aide said that his office had been collaborating with BoI, which is an important implementing agency for the scheme.

“If you need any information, if you are not sure of anything, go to the Bank of Industry.

“Once you provide the requirements, very quickly, you will get yours, immediately,” Adekunle-Johnson said.

The Managing Director of BoI, Dr. Olasupo Olusi, explained that the N200 billion Presidential Intervention Fund for MSMEs and Manufacturing Enterprises was established to support them towards driving economic growth and job creation.

Olusi was represented by Mabel Ndagi, Executive Director, Public Sector and Interventions of BoI.

He said that MSMEs are the driving force behind the nom-oil economy, contributing significantly to innovation, economic growth and job creation in the agriculture, manufacturing and services sectors.

The director said: “Despite the immense contribution to economic growth, MSMEs struggle to access the necessary funding to reach their full potential.

“In recognition of this, the Federal Government introduced the N200 billion intervention fund for MSMEs and Manufacturing Enterprises and appointed Bank of Industry as the executing agency to implement this initiative.”

He reiterated that the bank remains committed to playing its part in promoting and supporting MSMEs growth across the country.

Also, the Managing Director of Access Bank Plc, Mr Roosevelt Ogbonna, said the bank was committed to supporting MSMEs.

Ogbonna said: “In 2008, we focused on MSMEs with particular attention on women and youths. Ninety-four per cent of all businesses are MSMEs; 66 per cent of that, are owned by women and youths.

“That is the reason for our focus; we want to be known as Nigeria’s MSMEs bank.”

In Ogun, Governor Dapo Abiodun urged MSMEs in the state to take advantage of the N200 billion Presidential Intervention Fund to boost their businesses.

Industry, Trade and Investment commissioner Adebola Sofela gave the advice at a town hall and sensitisation programme for MSMEs and manufacturing enterprises on the fund in Abeokuta, the state capital.

The fund comprises N50 billion Nano grant, N75 billion loan scheme for big businesses and N75 billion loan scheme for MSMEs.

Sofela said the fund was designed to help enterprises to boost businesses and strengthen the operational capacity of entrepreneurs to contribute effectively to the local and national economic development.

“Many entrepreneurs in the state have benefitted from the Nano grant and other loan schemes of the fund at favourable terms for businesses, which are yielding results.

“The scheme is ongoing, and we are here today so that more entrepreneurs can be sensitised and their questions answered. We believe that more entrepreneurs will be able to benefit from this programme,” he said.

The commissioner, who was represented by the Special Adviser to the Governor on Trade, Mrs. Oluyemisi Somorin-Dawodu, noted that the intervention aligned with the economic transformation of Governor Dapo Abiodun’s administration.

He added that different programmes had been facilitated to engender business growth, skill development, access to finance, and many more, with provision of infrastructure and implementation of business-friendly policies.

The State Manager of the Bank of Industry (BoI), Mr. Michael Agidani, announced that the N75 bilion loan scheme for MSMEs was available for existing small businesses and start-ups that had registered with the Corporate Affairs Commission (CAC).

The banker explained that each business could borrow up to N1 million with nine per cent interest rate within fourth and sixth month, and repayable within three years, while enjoying a moratorium of three months.

A laundry business owner, Mr. Daniel Olukoga, and a member of the Association of Skilled and Vocational Artisans of Nigeria (ASVAN), Mr. Roshid Sodamola, said the programme had proven to be beneficial to different entrepreneurs across the state.

Also, the Federal Government has given conditions for prospective beneficiaries of the Presidential Grants and Loan Scheme for the Micro, Small and Medium Enterprises (MSMEs) to meet before they can access the loan.

The Akwa Ibom State Manager of the Bank of Industry (BoI), Tolulope Toluwase, listed the requirements at the formal launch of the scheme in Uyo, the state capital.

Toluwase said the project targeted 75,000 MSMEs, 75,000 direct jobs and 150,000 indirect jobs.

The state manager explained that each applicant must present a guarantor not below Grade Level 10 at the Federal Government civil service, BVN/NIN, four passport photographs, a valid means of identification of the applicant and their guarantor.

He added that any successful applicant who meets all the requirements would get N1 million loan to boast their business.

Toluwase said the repayment plan would span three years and be made on a monthly basis with an interest rate of a single digit.

He said: “We believe that N1 million per beneficiary when injected in a small and medium scale operation shall make a significant impact. Since it’s a loan, there must be some documentations. Anyone who wants to access must first of all be in business, must be a sole proprietorship and must be registered with Cooperate Affairs Commission (CAC). The interest rate is actually a single digit.

“Therefore, go and apply quickly so that you can be shortlisted. When you don’t apply on time and other people apply, they will take the money. The system will be watching the state that is applying more and when they reach that threshold, they will close that portal for them to allow other people to apply.

“They are going to treat the applications on first come, first served basis.”

Trade and Investment Commissioner John James described MSMEs as the backbone and highest employers of labour in Nigeria.

Thanking the Federal Government for its intervention to MSMEs across the nation, the commissioner urged prospective beneficiaries to channel the money to the appropriate business and not divert it to other things.

He said: “MSMEs employ about 80 per cent of our population and contribute about 40 per cent to our gross domestic product (GDP) in Nigeria. We want to thank the Federal Government, led by President Bola Ahmed Tinubu, for the interventions, and our governor, Umo Eno, who had supported the MSMEs in Akwa Ibom using my ministry and the Ibom LED to help the people.”

A poultry farmer and one of the beneficiaries of the earlier N50,000 grant, Anietie Udoh, disabused the minds of people who assumed the scheme was a scam.

“This programme is real. There is no bias, no political dichotomy,” he said.

Udoh urged others to key into the programme and benefit from the intervention.

Development Bank of Nigeria (DBN) has already empowered over 4,000 micro, small and medium enterprises (MSMEs) across the country through a combination of digital and physical training initiatives.

Building on this success, the DBN has announced the official launch of the 2024 DBN Entrepreneurship Training Programme (DBNETP), their flagship annual programme designed to equip MSMEs with the tools they need to thrive. 

This year marks the 6th cycle of the DBNETP, as a core element of the DBN’s commitment to supporting the growth of Nigeria’s entrepreneurial ecosystem.

“I am enthralled to announce the commencement of the 2024 edition of our flagship annual DBN Entrepreneurship Training Programme (DBNETP) for Micro, Small and Medium Enterprises (MSMEs) in Nigeria,” stated Dr. Tony Okpanachi, Managing Director, Development Bank of Nigeria. “Capacity building training is pivotal for MSMEs growth in Nigeria as it bridges the knowledge and skills gap, empowering entrepreneurs to innovate, compete, and thrive in a rapidly evolving economy.”

The DBNETP is designed to target MSMEs with the greatest potential for success.  To participate, businesses must meet specific eligibility criteria.  “Our capacity-building training is a catalyst for unlocking MSMEs’ potential as a key driver of economic growth, innovation, job creation, and prosperity in Nigeria,” Okpanachi continued. “Hence, establishing clear eligibility and selection criteria for the participating MSMEs ensures targeted support for businesses that need this kind of training most.”

A breakdown of the eligibility criteria for the 2024 DBNETP include: business owner must be at least 18 years old and a citizen or legal resident of Nigeria; the business must be based and operating in Nigeria; it must be a for-profit enterprise operating in any sector of the Nigerian economy and business owners must be available and committed to attending the training if their application is accepted.

The DBN said it will also be looking for businesses demonstrating strong potential for success through factors such as, the readiness of the MSME to access credit facilities; a strong and sustainable business model with a clear path to continued growth and demonstrable potential for growth and job creation.

The DBNETP offers a blended approach to learning, combining online and in-person components to cater to diverse learning styles and schedules. Participants will embark on a self-paced comprehensive curriculum covering nine (9) core business principles. This virtual component will be delivered through the DBN learning management platform accessible via the BizAid App. Shortlisted businesses will receive an intensive 5-day hands-on practical training program tailored to their specific needs through a needs assessment.

Read Also: DBN empowers over 4,000 MSMEs

The application process for the 2024 DBNETP is now open and applicants must register on the DBN Learning Management System (LMS).

Upon successful completion of the four courses and achieving the required pass mark, you’ll receive an email containing a link to apply for the face-to-face training programme. Within 24 hours, applicants will receive a confirmation email and following the application deadline, the DBN will screen and shortlist applicants based on the eligibility and selection criteria. Successful applicants will receive further communication with additional details about the training program.

The DBN in its statement encouraged all MSMEs to seize this opportunity to gain the knowledge and skills necessary to take their businesses to the next level.  By participating in the 2024 DBN Entrepreneurship Training Programme, in order to unlock new possibilities for their businesses and contribute to the continued growth.

Sahara Group Foundation, an arm of the Sahara Group, has signed a Memorandum of Understanding (MOU) with the Nigeria Philanthropy Office (NPO) to facilitate philanthropic and investment support for Micro Small and Medium Enterprises (MSMEs) in targeted sectors of the economy.

The MoU represents another milestone for Sahara Group Foundation in furtherance of its commitment to promoting access to energy and sustainable societies.

The Director, Governance and Sustainability Sahara Group, Ejiro Gray, said the partnership with the NPO will reinforce the critical role of entrepreneurship in the quest for sustainable development in Nigeria and become a template for “giving wings to the entrepreneurial spirit of the African Youth.”

The Chairperson, NPO, Ms Thelma Ekiyor, said the MOU and subsequent implementation of strategic projects would serve as a catalyst for significant job creation opportunities within the sectors to be supported.

“This partnership aims to orchestrate high-level catalytic philanthropic and impact investing support for MSMEs operating in targeted sectors including Fashion, Furniture Manufacturing, Agro- Processing, and Renewal Energy with significant potential for job creation,” she said.

According to a report by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), MSMEs form a significant part of Nigeria’s economy by contributing about 48 per cent of the national GDP, yet simultaneously face major challenges such as low access to finance, inability to secure loans from banks due to stringent collateral requirements and high interest rates.

MSMEs in Nigeria also suffer from inadequate infrastructure, inconsistent power supply and high operating costs.

Read Also: Umahi seeks synergy with states on federal road project delivery

Head, Programmes, Sahara Group Foundation, Chidilim Menakaya, said the partnership seeks to provide prospects for “repositioning and transforming MSMEs” through activities such as training, mentoring, and networking opportunities for entrepreneurs.

Menakaya further emphasised that Sahara Group Foundation through various programmes provided platforms for fostering sustainable growth for MSMEs, particularly in the aspect of seed funding, finance, strategy, branding and scaling advisory and opportunities for many startups.

She said: “Through our extrapreneurship strategy, pan-African initiatives such as the Sahara MAD Challenge (formerly named Sahara Impact Fund) and the Making a Difference Around Africa initiative, we are creating essential platforms for driving sustainable MSME growth across the value chain to enable young entrepreneurs and startups thrive and contribute meaningfully to socio-economic development.”

Micro, Small, and Medium Enterprises (MSMEs), have long been identified as the engine of industrial growth in any economy.

Around the world, MSMEs not only constitute the larger share of the businesses but also generate substantial employment, drive innovation, and are crucial for economic diversification and resilience.

According to the United Nations, this vital sector represents over 90% of businesses globally and accounts for 70% of employment, making it a fundamental pillar of economic stability and growth.

In both developed and developing nations, MSMEs play a significant role in sustaining economic activities, especially in rural and less developed regions. They are often the primary source of local innovation and are critical to the supply chains of large multinational companies.

But the irony, however, is that around here, this all-important segment of the industrial ecosystem suffers lots of privations many of the operators hardly ever talk about because more often than not, the odds are clearly stark against them.

The challenges that MSMEs encounter are manifold and vary significantly across different economic landscapes.

One of the most significant barriers for MSMEs is funding, which limits the rate of growth. This lack of financial support restricts their ability to invest in expansion, adopt new technologies, and develop the infrastructure necessary for scaling operations. Consequently, without adequate capital, these enterprises struggle to compete effectively, particularly in markets dominated by larger corporations with more substantial resources.

Besides, they face regulatory hurdles. Indeed, excessive bureaucracy and rigid regulations can be cumbersome for smaller businesses, as they do not have the resources to navigate these challenges effectively and thus can hinder their operational flexibility and ability to innovate.

Technological advancement also presents a significant challenge. As the digital economy grows, many MSMEs struggle to keep up due to limited digital literacy and lack of access to affordable technology solutions. This gap prevents them from optimising their operations and reaching potential customers effectively.

Also, access to the market remains a critical hurdle for MSMEs. Finding and retaining access to markets, both locally and internationally, includes difficulties in meeting compliance standards for export markets and competing with larger firms that have more resources. This challenge can limit their growth and scalability, impacting their overall competitiveness in the market.

Today’s consumers are more aware of environmental and social governance than ever before. MSMEs are uniquely positioned to innovate in sustainable practices due to their flexibility and local knowledge. However, they often need more support to implement these practices effectively. Encouraging sustainable development within MSMEs not only promotes social responsibility but also opens new business opportunities and markets that value sustainability.

Read Also: Emplacing supportive financing ecosystem for MSMEs

Around the world, there are myriad success stories of MSMEs that have overcome these challenges and significantly impacted their local economies and communities. These stories not only highlight the resilience and innovation inherent in MSMEs but also the effective strategies implemented by governments and private sectors to support them.

To harness the full potential of MSMEs, governments and policymakers must create supportive ecosystems that address these challenges. This includes simplifying regulatory processes, providing tax incentives, offering grants and subsidies, and facilitating training and development programmes. Additionally, creating more robust financial infrastructures that offer a range of funding options appropriate for small to medium-sized enterprises is crucial.

Globalisation has opened new markets and opportunities for MSMEs but also brought increased competition. To remain competitive, MSMEs need support in adopting new technologies and business practices that can improve their efficiency and expand their market reach. This includes embracing e-commerce, digital marketing, and supply chain innovations that can transform their business operations.

Interestingly, one of the key messages and subtext of the 2024 International Day of MSMEs seek to address several challenges besetting the sector.

In Nigeria, for instance, one key financial institution which sets stores by the ideals and ideas of harnessing the growth potential of the MSMEs through strategic alliance is the Wema Bank.

While attempting a horse of recall, Wema Bank’s Managing Director/CEO, Moruf Oseni at a public forum recently reeled out a sort of appraisal of its modest, albeit concerted efforts aimed at changing the narrative of a beleagured sector in dire need of a lifeline.

Wema Bank, Oseni revealed has been at the forefront of addressing the challenges faced by the MSMEs, including access to the market, financial accessibility, and infrastructural deficiencies.

The Wema Bank boss while acknowledging that the sector suffers from paucity of funds advocated for bespoke and innovative financing models that bridge funding disparities, adding that these funding options must offer flexibility and ease of access to the unique needs of (MSMEs).

He said: “The world we face is a transformed one. The COVID-19 pandemic shut millions of people inside their homes and completely disrupted the global economy and the supply chain that underpins it. Global growth has been firmly below double digits for the last few years.”

From available information, the bank has supported over 9,000 MSMEs with a total of N92 billion in funding, enhancing both local and international market access by organising fairs for approximately 2,000 female business owners. Through the ALAT for Business platform, Wema Bank has enabled the digital transformation for thousands of MSMEs, offering advanced banking solutions that streamline processes.

Additionally, the bank has facilitated the digital transition for numerous SMEs, improving operational efficiency through streamlined processes and regulatory simplification. Over 500 entrepreneurs have been trained through the SME Business School.

Wema Bank’s approach to fostering SMEs growth is built on innovative solutions and strategic partnerships. Central to their efforts are sustainability and social impact, ensuring that their initiatives contribute positively to the broader community.

One of the bank’s standout initiatives is the FGN SKILLNOVATION Program, a pioneering partnership with the Federal Government of Nigeria, Wema Bank has launched a programme aimed at promoting creativity, collaboration, and entrepreneurship among youths and SMEs. The first cohort registered over 400,000 participants, with a learning rate of 78%, drawing interest from Ivy League schools for further study. This program is a cornerstone of the FGN’s job creation objectives.

Understanding the pivotal role of women in economic progress, Wema Bank established the SARA proposition team to provide specialised services for women. This includes accessible financing solutions tailored to the unique financial needs of women, empowering them to pursue their entrepreneurial aspirations.

To enhance market access and support business expansion both locally and internationally, Wema Bank has partnered with Naija Brand Chick to organise fairs showcasing approximately 2,000 female business owners. These events, including the upcoming NBC African Fair London, not only enhance market access but also provide international exposure. This is facilitated by innovative payment solutions like ALAT for Business.

The Wema Bank ALAT for Business platform is a user-friendly mobile banking application that offers automated accounting integrations, bulk payment features, and a digital lending process. This platform, which allows transfers to up to 5,000 beneficiaries at once, enhances convenience and efficiency for SMEs. Wema Bank has also digitised the entire loan application process, providing funding in minutes without paperwork and collateral, with facilities discounted for female customers.

In targeting SMEs that lack traditional track records, the cluster lending programme offers banking services tailored specifically to thrift collectors, agents, and market leaders. This initiative facilitates their transition from conventional paperwork to digital platforms, streamlining processes and enhancing efficiency.

Wema Bank, in its strategic commitment to enhance the operational efficiency and financial literacy of MSMEs, has established the SME Business School in partnership with the Frankfurt School of Finance and Management. Launched in 2021, this innovative educational initiative has already nurtured over 500 MSME owners. The Business School offers structured training programs that provide crucial insights into business scaling strategies, financial management, and market positioning. This initiative not only equips entrepreneurs with the essential skills to drive their businesses forward but also supports their growth and profitability in an increasingly competitive market.

Additionally, Wema Bank enhances financial literacy and capacity building among SMEs through the first SME Business School established in partnership with the Frankfurt School of Finance. The bank supports these initiatives with business clinics, webinars, and newsletters which equip businesses with necessary skills and knowledge.

Renowned for its innovation, Wema Bank, in collaboration with the Enterprise Development Center (EDC) at Pan Atlantic University and the Mastercard Foundation, launched the transformative “Transforming Nigerian Youths” programme on August 7, 2023. The programme received an overwhelming response with 33,957 entries, 24,514 active women participants, and 4,806 currently engaged.

This initiative significantly impacts economic empowerment through a carefully curated curriculum featuring courses like Marketing Management and Business Plan, designed to empower women in the MSME sector by fostering resilience and triumph.

Among the 48 outstanding participants who completed all compulsory courses and eight electives, submitted growth plans, opened Wema Bank accounts, and were assigned to BDSPs, five women are shortlisted for grants, marking a significant entrepreneurial milestone.

This dynamic partnership underscores Wema Bank’s unwavering commitment to empowering women for a resilient, inclusive future. As a testament to their success, Wema Bank, in partnership with EDC and the Mastercard Foundation, awarded cash rewards totaling N2,500,000 to five exceptional women entrepreneurs.

Micro, Small and Medium Enterprises (MSMEs) in Nigeria and the sub-region have the potential to provide jobs and boost economic growth. But their capacity to unleash this potential is limited by inadequate funding. With SMEs’ financing gap projected to reach $6.1 trillion by 2025, the disparity between the funding they require to expand and the actual funds accessible to them come to the fore. This has prompted collaborative efforts to emplace a supportive ecosystem that facilitates funding access for MSMEs and reduce their investment risks, writes DANIEL ESSIET.

Globally, Micro, Small and Medium Enterprises (MSMEs) are widely credited with having the immense capacity to contribute to job creation, income distribution, and the industrialisation of rural areas. In fact, in Nigeria, which particularly boasts a large informal sector, MSMEs make up 48 per cent of the country’s Gross Domestic Product (GDP). They are also responsible for over seven per cent of the country’s exports, according to the National Bureau of Statistics (NBS).
However, while these MSMEs, ranging from micro-businesses to small manufacturers and export-focused companies play a crucial role in Nigeria’s economic ecosystem, they are faced with formidable obstacles which limit their potential to create jobs and drive economic growth and development.
And one of their tough challenges is securing funding to start their business or run same. Many MSME owners find it difficult to efficiently handle cash flow due to their limited expertise.
They lack financial knowledge and managerial skills, which hinder their overall success. Consequently, some of them struggle with budgeting, overspending, and accurately assessing their profitability. Without a good grasp of financial tools, many MSME owners risk missing out on favourable loan conditions and strategic opportunities for expansion. This has led to concerns about the readiness of MSMEs for investment.
In fact, the consensus is that inadequate access to finance and of course, challenging business environments are hindering MSMEs from contributing to economic development and wealth creation. However, efforts to change the narrative by eliminating these obstacles to unlock the growth potential of MSMEs are on course.
This followed the official launch in Lagos, of both the Research and Innovation System for Africa (RISA) Sustainable Systems for Research and Innovation Financing (SSRF II) project in Nigeria and the Nigerian Enterprise Support Organisation (ESO) initiative by Impact Investors Foundation (IIF) Nigeria. The event provided valuable insights on how governments and their development partners can unlock MSMEs’ growth potential.
It also explored strategies entrepreneurs need to utilise to secure funding at various stages of their growth, taking into account the wide range of capital options available and the various types of capital providers, including private equity, family and friends, grant providers, and angel investors. It also highlighted many challenges and the mixed progress that governments and development institutions are experiencing in their efforts to advance MSMEs.
The ESO initiative, implemented by IIF, is a cornerstone of the SSRF II project. The CEO of IIF Nigeria, MS Etemore Glover, explained that it is a transformative initiative that would drive innovation and investment in Nigeria. She stated that the goal of IIF is to build a thriving ecosystem where ideas can flourish and businesses can grow, ultimately contributing to the nation’s economic development.
Glover said: “The ESO initiative aims to create a dynamic network of key stakeholders from the innovation, enterprise development and investment communities, fostering an ecosystem that supports sustainable development, technological advancement, and economic growth in Nigeria.” According to her, by bridging gaps between researchers, innovators, investors, and policymakers, the ESO initiative seeks to enhance the capacity of local enterprises, stimulate economic activities, and promote inclusive growth.
She reiterated that with these actions, IIF hopes to drive a comprehensive vision of business development that combines macroeconomic elements with access to adequate financing, strengthening of innovation capacities and technological adoption, and aiming to have more resilient, productive, competitive, and sustainable MSMEs.

Read Also: Moniepoint harps on importance of MSMEs

Glover called on stakeholders to join hands in building a sustainable, innovative, and prosperous Nigeria, as well as create an environment where research and innovation are encouraged to thrive. She recalled that since 2020, a series of shocks to the global economy has had significant impacts on MSMEs and entrepreneurs and their access to finance.
Most recently, significant inflationary pressures have led to tighter lending conditions, limiting the flow of finance to MSMEs and acting as a barrier to investment.
Glover presented findings from recent business surveys carried out by the organisation and the need to enhance MSMEs’ capacity to innovate and implement solutions as well as attract impact investment.
She stressed the need for organisations to pay more attention to the developmental impact in their support for increasing MSMEs’ access to finance. The IIF Nigeria boss, however, said the organisation was committed to achieving a prosperous, inclusive, resilient, and sustainable Nigeria, while sustaining its efforts to eradicate extreme poverty.
In her remarks the Chairperson – Nigerian National Advisory Board for Impact Investing (NABII) and Vice-Chair, Global Steering Group for Impact Investment (GSG), Mrs. Ibukun Awosika, described the launch of SSRF II project and the Nigerian ESO Collaborative as a significant milestone in advancing Nigeria’s investment and innovation landscape.
Dr. Awosika noted: “Globally, SMEs play critical roles in the economic growth of nations to provide jobs, employment and revenue generation. In Nigeria, SMEs are key drivers of the economy and in 2020, employed 87.9 per cent of the workforce and contributed 46.31per cent to the national GDP.
“However, several issues constrain SMEs contribution of which access to not just finance but finance that is concessionary is one of the significant issues besides innovation and policies, requiring intervention.Meeting these demands requires structures and mechanisms that prioritise returns and also impacts, which is what impact investing provides.”
Dr. Awosika said the impact investing ecosystem in Nigeria is growing, and has a lot of opportunities that can be harnessed. “We need more information about the ecosystem, and this can come through collaboration and evidence-based research to spotlight the opportunities that abound in the impact investing ecosystem,” she stated.
According to her, in 2022, IIF and NABII commissioned a market-sizing study in collaboration with their colleagues in Ghana, and the outcome of the report revealed a $4.7 billion impact investing market in Nigeria with huge potential to increase with the right policies and collaboration among the stakeholders.
Awosika added that a study at the demand-side of the impact investing ecosystem in Nigeria conducted jointly by IIF and NISER x-rayed and spotlighted opportunities in the agriculture, health, education and energy sectors.
“To maximise the impact of the impact investing ecosystem to deliver good for our people and the planet, there is a need to strengthen intermediary services. Considering the limited access to affordable finance, poor infrastructure, limited market access, and other hurdles that innovative ventures face in the country, ESOs need to improve their capacity to support MSMEs,” she said.
She further highlighted the need to come together, bring their unique strengths and resources to the table and create synergies that may not be possible when they operate in silos. “This makes the RISA Fund Project to be a worthy course of action,” Awosika reiterated.
The Country Technical Lead, Nigeria, MS Alice Omisore, congratulated the IIF team on the launch of the project, adding that the RISA fund strengthens both the research and innovation ecosystems in Africa. Omisore confirmed RISA’s commitment to ensuring the successful implementation of the SSRF II project in Nigeria and Ghana.
The Director-General, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Mr. Charles Odii, said the government is taking significant steps to bridge this gap of availability of finance to MSMEs. He said the government is also working towards filling the funding gaps in pre-seed/ideation stage startups in collaboration with incubators.
For him, developing productivity, sustainability, and digitalisation of MSMEs is critical for economic growth in the country. According to him, there is a continued focus on diversifying financial sources and instruments important to meet the different needs of all types of MSMEs and entrepreneurs, and enabling them to act as an engine of resilient, sustainable and inclusive growth.
A panel discussion focused on “Driving Sustainable Innovation and Impact Investments through Ecosystem Collaboration” shed light on the significant financial hurdles that MSMEs are currently encountering.
The panelists included the Managing Director, Fragg Investments, Franklin Odoemenam; Founder, Recycling Scheme for Women and Youth Empowerment (RESWAYE), Doyinsola Ogunye; Founder, Muazu Africa, Tolulope Makinwa-Adeniyi; and Head, Lagos Business School Sustainability Centre, Ms Oreva Atanya.
Odoemenam set the ball rolling when he noted, for instance, that one of the main challenges that entrepreneurs face is accessing adequate and appropriate finance for their ventures. He stressed the importance of entrepreneurs understanding their financing needs, available sources of development finance, and the expectations of finance providers.
He also emphasised the need for MSMEs to improve internal processes and address key legal, financial, and operational gaps in their business models. The Fragg Investments boss stated that without a pipeline of investment-ready projects, attracting and channeling investment into the economy will continue to face serious challenges.
MS Atanya aligned with Odoemenam, pointing out that beyond the initial challenge of securing capital, many MSMEs struggle with lack of financial literacy and management skills. She stressed that the lack of expertise in managing cash flow can lead to poor budgeting practices, unnecessary spending, and difficulty in gauging profitability.
Additionally, the Lagos Business School Head of Sustainability Centre, however, said initiatives such as regular data filing platforms can help MSMEs address the issue of funding and ease their compliance burden.
Makinwa-Adeniyi of Muazu Africa highlighted some of the common obstacles MSMEs encounter, including a lack of expertise in comprehending, preparing, and utilising financial data for making business decisions, as well as adding value to their operations through strategic partnerships and business growth. She, however, said her organisation is making a significant effort to advance MSMEs led by women to promote gender equality.
For the founder, RESWAYE, Ogunye, there are windows of opportunity to be captured. This, according to her, represents a significant opportunity for local MSMEs to improve productivity and scale their businesses. They will also be well-placed to capture growth opportunities.
A common thread that ran through panelists’ presentations was their call for improved coordination among stakeholder agencies, MSMEs, and the entrepreneurial ecosystem in order to open up access to capital. This underscored the need for conduit agencies to be catalyst for investors, especially foreign investors, to provide a bridge of trust between MSMEs and investors.