The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has identified a lack of financial literacy and business managerial skills as the main reasons for the underperformance of Micro, Small, and Medium Enterprises (MSMEs).
Speaking to NewsNow, SMEDAN’s Head of Corporate Affairs, Moshood Lawal, acknowledged the decline in MSME performance, attributing it to the challenging business environment and financial illiteracy prevalent among MSME operators.
Lawal emphasized the high rate of financial illiteracy and the need for improved business management skills among MSMEs in Nigeria, as revealed by SMEDAN’s research.
Responding to a report from PwC Nigeria indicating a drop in demand for MSME products, Lawal stated that SMEDAN, led by Mr. Charles Odii, was actively addressing these challenges.
He mentioned initiatives such as the N5 billion SMEDAN Sterling Bank partnership offering MSMEs access to credit at single-digit interest rates, and the N4 billion SMEDAN matching fund aimed at enhancing the competitiveness of MSMEs in specific states.
According to the PwC Nigeria survey of over 500 MSMEs, 38% cited high product costs while 36% pointed to dwindling purchasing power as reasons for decreased demand, underlining the need for financial support totaling $32.2 billion (N13tn) for Nigerian MSMEs.
National Vice President of the Nigerian Association of Small Scale Industrialists, Segun Kuti-George, expressed concern over the report findings, describing them as a bleak representation of the challenges faced by small business owners.
Kuti-George raised doubts about the effectiveness of government interventions, suggesting that many affected business owners were not benefitting significantly from available support.
He urged the government to involve industry stakeholders in decision-making processes, criticizing the cumbersome procedures for accessing grants and emphasizing the importance of prioritizing the needs of businesses in distress.