The Nation Newspaper

Tag: SMEs’

  • UNIDO, NACCIMA, LCCI partner on SMEs

    UNIDO, NACCIMA, LCCI partner on SMEs

    The Investment and Technology Promotion Office of the United Nations Industrial Development Organisation (UNIDO) has launched another phase of its capacity building programme by training over 40 Nigerian women in financial literacy, in Lagos.

    The financial literacy project, which was in collaboration with the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and the Lagos Chamber of Commerce and Industry (LCCI), was initiated to equip the business owners with interactive online learning packages, financial literacy tools and major mechanisms for upgrading and expanding existing enterprises.

    The Chief Technical Adviser, UNIDO-ITPO, Mr. Stanislaw Pigon, said: “Aside from the training, we will also offer the entrepreneurs business counseling and mentoring programmes aimed at facilitating enterprise growth. Our online tools are open to the entrepreneurs as they are expected to ask questions or seek for clarifications. From the perspective of the MSMEs, the most important factor is that they are ‘bank-ready’. This means we need to offer them some simpler tools to present the financial aspects of their business ideas.

    “We are facing a problem of financial literacy, starting with university graduates, who cannot find jobs, to existing, even successful Micro, Small and Medium Enterprises, which cannot find resources to grow.”

    The Head, UNIDO-ITPO, Nigeria, Ms. Adebisi Olumodimu, explained that the workshop was designed to support the Federal Government in its bid to diversify the economy, empower business owners, especially women, across the agriculture, manufacturing, and food and beverages sectors and ensure they are equipped with best practices tools for the development of value-added services.

  • ILO seeks fresh loan strategies for SMEs

    ILO seeks fresh loan strategies for SMEs

    Enterprises, using bank loans as significant share of their working capital, tend to have higher wages, productivity and lower unit costs. But Small and Medium E,nterprises (SMEs) according to International Labour Organisation (ILO), often, cannot obtain or afford such financing.

    To the ILO, 10 percentage point of larger proportion of bank loans in working capital is associated with 2.2 per cent higher wages, 5.9 per cent higher labour productivity and  3.9 per cent lower unit labour costs.

    ”SMEs play a crucial role in creating jobs, but often lack access to the external funding they need,” said Deborah Greenfield, ILO deputy director-general for policy

    She lamented that in many cases SMEs cannot get bank loans or only get credit at comparatively high rates, because they lack audited financial statements, repayment history and business assets for use as collateral.

    “Policymakers need to consider strategies that would help SMEs access such funds, including bank loans for their working capital, which can have strong benefits for both workers and employers,” she added.

    The ILO’s ‘World Employment and Social Outlook 2017: Sustainable Enterprises and Jobs”, released recently, showed that firms were more likely to make greater use of bank loans for working capital in countries that have stronger creditor rights protection.

    The same is true of countries that have addressed issues such as poor accountability, lack of respect for the rule of law and corruption.

    Some innovative practices have proven beneficial in allowing firms access additional capital for growth, while supporting vulnerable groups and broader social and environmental issues.

  • Afreximbank: innovative financial solutions support SMEs’ growth

    Afreximbank: innovative financial solutions support SMEs’ growth

    The African Export-Import Bank (Afreximbank) has said that innovative financial solutions like credit insurance will help promote Small and Medium Enterprises (SMEs) growth and boost regional economic integration.

    The position was disclosed at the end of one-day workshop organised by the Afreximbank in collaboration with FCI and the African Capacity Building Foundation (ACBF), in Sal Island, Cape Verde as part of the Bank’s Annual Structured Trade Finance Seminar.

    The FCI is the leading global association for factoring and open account receivables finance. ACBF supports capacity building initiatives in Africa through investments in capacity building institutions; technical assistance for capacity building projects and programmes; and engagement in knowledge and learning activities.

    The bank said that the basic tenets of factoring or debtor finance, the role of credit insurance in unlocking access to finance for SMEs and the best ways to promote the development of the two financial instruments, support economic growth and regional integration in Africa.

    Managing Director of Afreximbank’s Intra-African Trade Initiative and Chairman of the Africa Chapter of FCI, Kanayo Awani, told participants that “despite new market opportunities opened up by the process of globalisation and increased regional integration, SMEs continue to be constrained due to their lack of resources, their difficulties in achieving economies of scale and the higher transaction costs they face compared to large firms”.

    “We are persuaded, though, that the solution to these challenges exist in rolling out effective and innovative financial products such as factoring,” she said.

    Awani noted that Africa currently accounted for less than one per cent of the global factoring turnover, saying that the industry was largely dominated, at 60 per cent, by European factors whose turnover represented 10.4 per cent of the European Union’s Gross Domestic Product (GDP) in 2016. That figure amounted to 1.5 trillion Euros.

    She disclosed that to promote the emergence and growth of factors across Africa, Afreximbank provides dedicated lines of credit and offers technical assistance to players in the financial industry. The bank also provides legal advice to regulators using the Model Law on Factoring which it developed.

    Awani added that Afreximbank had forged strong partnerships with leading institutions, such as FCI and ACBF, as part of its education and training activities.

    In his contribution, Executive Director at the Central Bank of Cape Verde, Carlos Furtado, who stood in for the Governor of the bank, said that by providing immediate liquidity to SMEs, factoring gave them the financial boost to allow them to integrate into regional and global value chains of growth sectors.

  • Facebook to train 50,000 Nigerian SMEs in 2018

    Facebook to train 50,000 Nigerian SMEs in 2018

    Facebook has said it will train and support over 50,000 students, small businesses ( SMEs ) and creative entrepreneurs across Nigeria in 2018.

    Facebook’s Public Policy Director, Africa, Ms Ebele Okobi, during a news briefing on Wednesday in Lagos, said that the training would be through a series of digital skills, as well as long-term impact programmes.

    Okobi said that the trainings and support was Facebook’s initiative in its ambition to drive innovation, skills development and economic impact in Nigeria.

    She said that the trainings and support was Facebook’s new nationwide initiative to further cement its commitment and investment in Nigeria, and across the continent.

    According to her, Facebook would be incorporating a series of high profile partnerships, training programmes and a physical space that will serve as a center for learning and skills development.

    “This set of initiatives is aimed at helping to develop and nurture communities, including small businesses, the tech and start-up ecosystem, youths and creatives.

    “In Nigeria, more than 22 million people use Facebook every month and 87 per cent of SMEs say that when they hire, digital skills are more important than where an applicant went to school.

    “This demonstrates that the power of digital skills to aid economic growth and development has never been more important

    “At Facebook, our mission is clear: To give people the power to build community and bring the world closer together.

    “Our investments and commitments announced in Lagos today further reflect our intent to partner with Nigeria’s policy makers and its vibrant tech and entrepreneurial eco-system to create economic opportunity and independence in Nigeria and across Africa,” she said.

    Okobi said that Facebook was committed to working with Nigerian small businesses, tech entrepreneurs and the next generation of leaders to better understand and utilise the power of digital tools for economic growth.

    She said that Facebook would be launching a series of learning-based programmes facilitated by local training partners, to accomplish its mission.

    Okobi said that the learning-based programmes had been designed to provide skills that would lead to employment and support the growth of small businesses.

    She said that the learning-based programmes include: Aspiring Entrepreneurs, Jobs for Youth, Boost your Business, Creative Entrepreneurship Training, and Online Safety + Digital Literacy Training in Schools and Universities.

    According to her, Facebook undertook a detailed ‘Economic Impact Study’ to further understand how communities like small businesses and consumers in Nigeria use the platform, and the effectiveness of social media as a growth tool.

    “Nearly 1 in 2 small businesses on Facebook say they built their business on the platform.

    “Sixty-two per cent stated they have been able to use Facebook to help find employees for their business.

    “Over half (58 per cent) of small businesses on the platform say they have been able to hire more employees due to growth since joining Facebook,” she said.

    Founded in 2004, Facebook’s mission is to give people the power to share and make the world more open and connected.

    People use Facebook to stay connected with friends and family, to discover what is going on in the world, and to share and express what matters to them.

    Facebook has 1.37 billion daily active users on average worldwide and 7.2 million daily visitors from Nigeria.

    NAN

  • CBN injects $210m into Forex market

    CBN injects $210m into Forex market

    As the Monetary Policy Committee (MPC) of the Central Bank of Nigeria ( CBN ) commenced its last meeting for 2017, the bank injected has 210 million dollars into the inter-bank Foreign Exchange Market.

    The CBN Acting Director, Corporate Communications, Mr Isaac Okorafor in a statement issued on Monday in Abuja, said the interventions were in the Wholesale, Small and Medium Enterprises (SMEs) and invisibles windows.

    He said the bank offered the 100 million dollars to the wholesale segment, while the SMEs segment received the sum of 55 million dollars.

    Okorafor also said that the invisibles segment, comprising tuition fees, medical payments and Basic Travel Allowance (BTA), among others also received an allocation of 55 million dollars.

    According to him, the releases are aimed at boosting liquidity, trade and ease of remittances for legitimate personal commitments.

    He said the bank was quite pleased with the rate of N360 to a dollar, noting that the continued intervention by the CBN in the inter-bank forex market had largely checked unwholesome activities of currency speculators.

    He, however, stressed that the CBN would not relent in its monitoring of the market in order to ensure that authorised dealers abide by the extant rules.

    The News Agency of Nigeria (NAN) recalls that the CBN had in its last intervention injected 195 million dollars into the inter-bank Foreign Exchange Market.

    Meanwhile, the naira maintained its steady rate against major currencies around the globe, exchanging for N360 to a dollar, N420 to the Euro and N470 to Pounds Sterling in the Bureau De Change segment of the market.

    Read Also: Forex: CBN boosts liquidity with $195m

  • Some cost saving measures for SMES (2)

    Some of the ways to manage this cost include:

    1. Set a budget for your telephone and internet usage on a monthly basis.
    2. Have a dedicated business line for your official calls to be used by office staff and it must be for official use only.
    3. Ensure internet usage in the office is restricted to official use only.
    4. Communicate more using other cheaper means such as WhatsApp, email, text messages etc.

    Transportation cost

    This is another area where businesses spend a lot money. Use the following methods to curtail this cost.

    1. Have a limit set for each location/trip as per transport cost.
    2. Discourage staff from claiming car hire fare as much as possible.
    3. Do a cost benefit analysis depending on the staff number before using a staff bus. It may not be cost effective.
    4. For companies with official cars and drivers, try as much as possible to discourage the use of cash. Have arrangement with filling stations to use their cards and also set monthly limit for the card per each vehicle.

    Diesel/power cost

    For businesses that depend a lot on power, diesel/power cost may be another area of concern. Take note of the following:

    1. Discourage the use of cash to purchase diesel.
    2. Ensure your diesel tank is calibrated.
    3. Diesel delivery should be done during official working hours and ensure there is always a third party confirmation of the quantity delivered.
    4. Have a log book to monitor supply, usage, meter reading, PHCN supply time etc.
    5. Ensure the capacity of the generator is not bigger than what is needed to reduce diesel consumption. And if possible have at least two different sizes to be used alternately based on capacity needed per time.

     

     

  • Yaba SMEs seek agreement with Lagos State

    Small and Medium Enterprises (SMEs) at the Yaba Industrial Estate, Sabo, have called on the Lagos State government through the Ministry of Commerce, Industry and Trade, to sign a Memorandum of Understanding (MoU) with them on their welfare before they are evicted.

    The entrepreneurs said though they are industrial tenants of the state, the idea of relocating them to another place, as being mooted, should be backed up by a concrete agreement on their welfare and not by oral submission as allegedly done by Ibile Holdings, the investment arm of the government.

    The SME operators were served a notice of takeover of their premises by Ibile Holdings, following the submission of  Governor Akinwunmi Ambode that the state was to relocate tenants of the premier industrial estate to Imota, Ikorodu and construct a technology hub at the premises.

    Yaba Industrial Estate Occupants Association Chairman, Alhaji Mukaila Adeosun, said although they understood the need for technology as the future of any serious nation, they believed that their relocation should not be an issue now as it had been  settled  in an out of court agreement in 2010.

    He said the out of court agreement provided for the withdrawal of the letter of relocation issued by the Commissioner for Commerce and Industry, represented by the state Counsel, Mrs. Oladipupo Adeosun.

    Alhaji Adeosun said this at the maiden meeting with the concessionaire of the industrial estate, Ibile Holdings, in the presence of the Director, Ministry of Commerce, Industry and Trade, Mr. Lekan Odanbono.

    He said the relocation notice ought to have come from the Ministry of Commerce, Industry and Trade and not from the concessionaire, which was a rude shock to them, hence their reply to the concessionaire that they do not recognise them.

    “Yaba Industrial Estate is the first in the country and we have been maintaining it, paying our rent to the government and also saved it as an heritage for Nigeria’s small and medium entrepreneurs in manufacturing of made in Nigeria products.

    “We deserve to be left alone to continue manufacturing for Nigerians and not be ejected. Even if we were to be ejected, we should be treated as partners in the development of the state and should have an agreement with the government on our welfare,” Adeosun said.

    Secretary of the estate, Mrs Alaba Bamgbose, said their plea is that Ibile Holdings should sign an agreement not to disturb them from doing their work until where they will be relocated to will be ready and allocated to them.

    “We have been abandoned for long and the only time we are seeing government now is when we are to be evicted.

  • 9mobile to boost SMEs

    In further demonstration of its commitment to the growth of small businesses in the country, 9mobile has hinted of plans to empower Small and Medium scale Enterprises (SMEs) in and around Lagos at its quarterly business networking and empowerment platform, Market Access scheduled to take place on Thursday, October 19.

    Market Access organised in partnership with the Enterprise Development Centre of the Pan Atlantic University, is a platform for SME owners to interact with large corporations with the objective of sharing knowledge and strategies that can enable the growth of start-ups and small businesses.

    The Lagos edition will hold at Zone Conference Centre, Plot 9, Gbagada Industrial Scheme, beside UPS, Gbagada Expressway, Lagos. The theme of the Lagos Market Access forum is, ‘Access to Sustainable Market for SMEs: Challenges & Opportunities.’

    Speaking about the forum, the Director, Enterprise Market Segment, 9mobile, Plato Syrimis, said 9mobile Market Access empowers potential entrepreneurs by facilitating opportunities for them to network and share knowledge/ideas as this is an important driver towards achieving their individual goals.

    “SMEs are enablers of national economic development and one of the ways that we can help them to fulfil that role is to empower them with the essential knowledge and strategies they require to nurture their businesses,” he said.

     

    9mobile is an innovative network and we are delighted to continuously be at the forefront of empowering SMEs across Nigeria through the Market Access platform,” he said.

     

     

  • ‘SMEs contribute about 48% to GDP’

    ‘SMEs contribute about 48% to GDP’

    Dr Femi Egbesola, National President, Association of Small Business Owners of Nigeria (ASBON), in this interview with Bukola Aroloye, speaks on challenges of small and medium scale enterprises. Excerpts:

    What has been the contribution of SMEs to the economy in the last five years?

    According to the Nigeria Bureau of Statistics, small and medium scale enterprises (SMEs) in Nigeria have contributed about 48% of the national GDP in the last five years.

    What is government investment to SMEs in terms of grant?

    Well, while the President Goodluck Jonathan launched the YouWin programme to provide grant to SMEs, we are yet to see any major grant programme under this present administration. However, there has been quite a number of intervention funds made available to SMEs.

    The intervention funds provided by this present administration has not been able to achieve much positive result largely because of the harsh economic condition of the country at the moment due to economic recession and also because of the difficulty of accessing most of this fund by an average SME. However, give or take, at least some has benefited from it, though the percentage of beneficiaries is really nothing to write home about compared with the teeming number of SMEs that actually need this funds.

    Many do survive by coming to terms with the reality that you just give it all it takes. This in a way has brought out a lot of ingenuity in business owners. While some saw need to cut down on their running expenses and staffing, others increase their access to market by fully exploring the use of various social platforms to market their products or services. Quite a number also sought out other cheaper loans rather than approach the commercial banks. A case of reference is the LSETF loan provided by the Lagos State government at 5% interest rate.

    Wastefulness was cut down to its minimum and many diversified to other fast selling and easily affordable products and services. Unfortunately, a lot who can’t face the storm closed shop

  • Minister to SEC: set guidelines for SMEs rating

    The Minister of State, Industry, Trade and Investment, Aisha Abubakar has urged the Security and Exchange Commission (SEC) to coordinate and set guidelines for licensing Small and Medium Enterprises (SMEs) rating of companies. He said the rating will help the nation know how SMEs are faring.

    The Minister disclosed this at the stakeholders roundtable on the proposed SMEs rating agency in Abuja, adding that this is the most trying period in Nigeria’s economic management history.

    She said: “Though we are out of recession, we all know that the MSMEs sub sector holds the key to hastening the economic recovery process. This government is interested in creating the appropriate environment that will turn Nigeria into investors’ preferred destination. All the capital requirements to achieve this are in abundance in this country.

    “What this government is doing is to connect all the broken lines. This may take time but it is achievable. A rating agency should design scoring solutions for SMEs, it should express its riskiness, by subjecting thm to the ratig criteria. Financial institutions will use this rating to decide the kind of relationship they will develop with the SME in granting loans such as the amount to be granted.”