Technological advancement and digitalization is rapidly taking over the global economy and constantly shaping business operations, hence businesses under the Micro Small and Medium-scale are urged to incorporate it into their business activities to accelerate growth.
As an important component of the business environment and a significant contributor to economic growth, MSMEs are essential in delivering more inclusive globalisation and growth, however, they are lagging behind in the adoption of digitalization and technology.
This was discussed at a business development webinar themed “Assisting SMEs to succeed and adapt to the new digital economy” organized by the Edo State Investment Promotion Office (ESIPO) in collaboration with OZÉ, a mobile platform that equips SMEs in Africa to make data-driven decisions.
Meghan McCormick, Chief Executive Officer (CEO) & Co-founder, OZÉ said that using traditional models for business operations drags growth prospects and constrains its economic impact hence the need to adopt digital approaches.
“Many businesses operate with limited market size while conducting transactions in high-risk conditions, they also lack proper documentation which limits their access to opportunities and credit,” she said.
She advised that optimizing digital approaches will help expand market reach, reduce payment risk, automate and keep records, and also ensure proper distribution of funds all of which will help accelerate growth and profitability.
Sanjay Kalpage, senior finance specialist, International Finance Corporation, said MSMEs are critical to economic development but many of them are informal and lack expansion ability.
He said that the digital economy offers new solutions to MSMEs however the progress has been limited with data showing that only six percent of MSMEs have an e-commerce platform and only 12 percent have websites.
Kalpage who is also the MSMEs practise group lead said that key stakeholders like government and corporate organizations have a role to play in integrating MSMEs into the digital economy.
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“Banks can design products and services that enable MSMEs to leverage the digital economy, they can also provide tools to improve credit access and financial literacy. The government also needs to promote e-commerce and increase mobile money penetration in the country while addressing infrastructure constraints such as poor internet access,” he said.
Paul Oluikpe, deputy director, financial inclusion delivery unit, Central Bank of Nigeria (CBN) said 35.9 percent of Nigeria’s population are financially excluded however growth of the digital economy is transforming business activities and is expected to drive financial inclusion.
He noted that digital products and solutions are very few and in addition current products and services are not seeing much uptake in target demographics which calls for the remodelling of business activities.
“It is urgent to promote market collaborations and use cases that can drive adoption while implementing test and learn approaches,” he recommended.
Joel Edionwe, Permanent Secretary, Ministry of Wealth Creation, Cooperative and Employment, Edo state in his remarks reiterated that the Edo state government was committed to driving development among SMEs while providing tools and platforms for support.
