Development Bank of Nigeria (DBN) has revealed that the financing needs of Nigerian businesses under the Small and Medium Enterprises (SMEs) sector is close to N3 trillion.
According to the bank, the funding need of businesses in the space is so huge that no single development financing institution in Nigeria has the capacity to fulfill the funding gap in the sector.
Specifically, the Head of Corporate Services, DBN, Idris Salihu, said there is a need for collaboration among key players in the financial institutions, noting that active involvement of key stakeholders in the industry would go a long way in addressing the funding need of SMEs in Nigerian.
He bemoaned the challenges confronting the sector in Nigeria, despite that it potentially constitutes the most dynamic firms in emerging economies, limiting their expansion capacity and impeding development.
According to the National Bureau of Statistics, SMEs account for 96 per cent of businesses and 84 per cent of employment creation in Nigeria.
With a total number of about 17.4 million, they account for about 50 per cent of industrial jobs and nearly 90 per cent of the manufacturing sector, in terms of several enterprises.
This demonstrates the immense impact that the SME sector has on general economic advancement. Additionally, by creating jobs for middle and lower-income earners, SMEs serve as influential catalysts for poverty alleviation, job creation, and income generation.
It is noteworthy to acknowledge that available evidence shows SMEs occupy an important and strategic place in economic growth and development in all countries – not only developing ones, by constituting as high as 90 per cent of enterprises in most economies worldwide.
Salihu noted that inappropriate structuring impedes and restricts their economic prosperity and growth potential in Nigeria, adding that appropriate structuring would grant them access to various funding opportunities from various institutions in the market.
He argued that there are structured and well-outlined business strategies that are missing when SMEs do not obtain the requisite professional knowledge which discourages investors from investing in the business.
“No single development finance institution that can actually fill that gap alone and that is the essence of having key players in the industry providing funding for SMEs.”
He added that accessibility challenge can be addressed through awareness creation that would enable SMEs have knowledge of funding opportunities available in the market.
He further urged SMEs to structure their businesses properly to create an ecosystem that would attract funding from commercial banks and help ensure business sustainability.
According to the National Bureau of Statistics, SMEs account for 96 per cent of businesses and 84 per cent of employment creation in Nigeria.
With a total number of about 17.4 million, they account for about 50 per cent of industrial jobs and nearly 90 per cent of the manufacturing sector, in terms of several enterprises.
This demonstrates the immense impact that the SME sector has on general economic advancement. Additionally, by creating jobs for middle and lower-income earners, SMEs serve as influential catalysts for poverty alleviation, job creation, and income generation.
It is noteworthy to acknowledge that available evidence shows SMEs occupy an important and strategic place in economic growth and development in all countries – not only developing ones, by constituting as high as 90 per cent of enterprises in most economies worldwide.
Salihu noted that inappropriate structuring impedes and restricts their economic prosperity and growth potential in Nigeria, adding that appropriate structuring would grant them access to various funding opportunities from various institutions in the market.
He argued that there are structured and well-outlined business strategies that are missing when SMEs do not obtain the requisite professional knowledge which discourages investors from investing in the business.
“No single development finance institution that can actually fill that gap alone and that is the essence of having key players in the industry providing funding for SMEs.”
He added that accessibility challenge can be addressed through awareness creation that would enable SMEs have knowledge of funding opportunities available in the market.
He further urged SMEs to structure their businesses properly to create an ecosystem that would attract funding from commercial banks and help ensure business sustainability.
