There is no gainsaying what the coronavirus pandemic did in global socio-economic realities. What is also irrefutable is that small businesses have been the worse hit amongst the victims’ rollcalls.
Beyond the economic uncertainty challenging a sustainable business environment, there was also the ravaging impact of the pandemic on healthcare that slowed productivity, hampered manpower and piled pressure on the unemployment scourge.
A steadily rising inflation now peaked at over 18% in April 2021, coupled with an economy that dipped into recession and back, acerbated by violent civil unrest and insecurities that slowed pan-Nigerian logistics, the Nigerian small business proponents have experienced a perfect storm.
According to the Nigeria Bureau of Statistics (NBS), Small and Medium Scale Enterprises (SMEs) remain critical to the country’s economy, contributing about 48% of the national GDP in the last five years and accounted for 84% of the national workforce.
Despite these contributions to the Nigerian economy, SMEs continue to face growth-hampering challenges such as lack of access to funding, skilled human resources, high cost of doing business, among others. These existing conditions already posit a challenging environment for SMEs to thrive; the pandemic’s entry into the equation will surely heighten their difficulties and slow their capacity to bounce back from this economic pandemic.
According to a survey by FATE Foundation and Budgit on the impact of COVID-19 on Nigerian on small businesses, 94.3% said the pandemic adversely disrupted their operations. 72.2% said the pandemic impacted their cash-flow; 67.8% said their sales went south, and 59.2% said their revenue took a hit.
In tackling what may be the most challenging global health and economic crises of our time, the instinctive response would expectedly tilt towards immediate needs such as health, food, security, and jobs. However, there is an urgent need to prioritise interventions for the SME sector – the backbone of major developing economies.
We have identified three existing business interventions that SMEs in Nigeria should leverage to recover from the pandemic’s overwhelming effect. These interventions and programmes include:
- The Federal Government MSME Survival Fund: A couple of months ago, the FG launched the Survival Fund Programme targeted at individual artisans and small businesses. The Survival Fund Programme (www.survivalfund.gov.ng) is part of the Economic Sustainability Plan, which aims to support and protect businesses from the potential vulnerabilities brought by the COVID 19 pandemic.The programme categorised into Payroll Support, Guaranteed Offtake, and MSME grant, is designed to provide a cushioning effect to business owners’ pain points. With the Payroll Support, business owners are assisted in paying employees; the Guaranteed Offtake helps businesses kickstart or rebuild, while the MSME Grant provided free funding for badly hit MSMEs. The programme is opened to any Nigerian with a running business (either registered or not registered).
- LSETF MSME Loan Programmes: The Lagos State Employment Trust Fund (LSETF) was established with a core mandate to tackle unemployment, promote job creation, entrepreneurship, and skills development in the state. The Loan Programme, one of its intervention vehicles, provides access to affordable funding for small business entrepreneurs. LSETF Loans bear one of the lowest interest rate regimes in the country and require zero collateral from successful applicants.The agency also recently unveiled the LSETF-Lagos Economic Acceleration Programme (LEAP) sector-specific intervention programme to help businesses in the identified high-impact sectors with substantial employment opportunities recover from the pangs of the pandemic. These sectors include Technology, Education, Healthcare, Agriculture, Hospitality, Tourism, Creatives and Entertainment. Besides providing access to affordable finance, the agency also offers business support, legal advisory, capacity building programmes, access to market linkages, mentorship support towards business expansion opportunities for its beneficiaries. To apply and receive more information, kindly visit the website www.lsetf.ng
- L-Boss by Leadway Assurance: L-Boss by Leadway Assurance is dubbed the “perfect assistant to every entrepreneur”. With the growing risk level for small businesses operating in Nigeria, as evidenced by the economic recessions, civil unrests, pandemic, insecurity issues, and lockdowns that halted business operations, it is crucial entrepreneurs become the Master of Risk Identification, Risk Mitigation and Risk Management by having in place a comprehensive business cover to cushion sudden financial losses. This comprehensive policy brings the business’ multiple assets – including content in your premises such as vehicles, computers, stock items belonging to customers, and employees under one cover.
- This policy is specially designed to help small and medium-sized businesses glide in a storm. With a default cover period of one year, the policy offers flexible premium payment options of either monthly, quarterly, or semi-annually to help business owners with cash flow issues enjoy the provision of this cover. This product affords the entrepreneur the happiness and rest of mind need to run the business, assured that should uncertainties and unforeseen circumstances arise, there is a perfect assistant ready to walk with you towards the journey of recovery and rebuilding.
For more details, please call the Leadway Assurance customer care helpline on 01-2800-700. You can also send an email to Lcs@leadway.com for professional advisory or request a call back by visiting www.leadway.com/call-me.
We are within your reach on our social media outlets – @LeadwayAssurance on Facebook & Instagram, @Leadwayinsure on Twitter. You can send a DM, and we would revert with all the information you require.