Contrary to the popular belief that finance is the major challenge micro, small and medium-scale enterprises (SMEs) face, experts in the Nigerian entrepreneurship landscape have said that inadequate investment in capacity building and poor market access are more pertinent issues.
The experts, who spoke at the BusinessDay’s SME 100 Awards, themed ‘How SMEs can thrive in an age of volatility’ held recently in Lagos, said major challenges facing MSMEs are more than the commonly indicated issue of funding.
Taiwo Olaniyan, head of business support unit at Lagos State Employment Trust Fund, said that over 70 of 100 business owners will point to funding as their major challenge, whereas, “funds accessed will never be enough if a lot of other factors are not prioritised.”
Similarly, David Lanre Messan, lead, FirstFounders, while speaking during the first-panel session themed “Funding for SMEs” explained that business owners summarise finance for their businesses as just lending, meanwhile lending is just one of many options to accessing finance to run one’s business.
Olaniyan added that operators of small businesses must prioritise capacity as a continuum, seek better ways to maintain efficiency in an evolving economy, and better ways to satisfy customer needs.
Messan also emphasised that adequate capacity building will help equip MSMEs to be investor-ready while broadening their skills in running a successful business.
Other panelists at the event also brought to the fore the importance of digitisation as a viable way to transform businesses.
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“Business environments keep changing at a rapid speed, new trends and technology continue to emerge and entrepreneurs need to adopt these new techs to adapt and evolve as well,” Joseph Nnanna, the chief economist of the Development Bank of Nigeria plc, said in his keynote address.
He added that consultants have coined the term “VUCA” which stands for “Volatility, Uncertainty, Complexity, Ambiguity” to describe the present economic landscape in the country, and the world.
Hence, businesses have to innovate or die. And it is as though businesses do not know how far they can go with digital transformations, he said.
Small and medium enterprises, according to the World Bank, play a major role in most economies, particularly in developing countries. SMEs account for the majority of businesses worldwide and are important contributors to job creation and global economic development.
According to a report by the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Nigeria has 39.7 million MSME operators and contributed 46.3 percent to the country’s GDP in 2020.
An award night was also held to recognise and celebrate the impact and achievements of 100 MSMEs in Nigeria who were able to scale their businesses amid a difficult operating environment.
