As the cost of doing business in Nigeria continue to rise, small and medium scale enterprises have started leveraging on technology to stay afloat.
Lynda Saint-Nwafor, the Chief Enterprise Business Officer at MTN revealed this during the recently held Doing Business in Nigeria Conference (DBNC) held in Lagos.
She said slowing demand has led to SMEs identifying alternative channels to sell products, with 20% of formal businesses being sold via online channels.
“Likewise, there has been a proliferation of Nigerian startups offering MSMEs digital SME services, including quick credit, payment wallets and bookkeeping services,” she said.
Saint-Nwafor noted that the number of MSMEs in Nigeria dropped by 2 million between 2017 and 2021, with most key metrics trending downward.
“Only 4% of MSMEs in Nigeria reported having access to commercial credit finance with 59% citing personal savings as their primary source of capital.
“Even when funding is available, low awareness of opportunities and a lack of financial knowledge remain major barriers to SMEs accessing the required support.
“20% of MSMEs also indicated inconsistent power supply as a top challenge, leaving businesses to source other alternative power supply,” she said.
Highlighting some of the challenges SMEs face in Nigeria, she said in spite of funds chasing start-up and other businesses, only 4% of MSMEs have access to commercial credit finance, mainly due to low awareness of opportunities and lack of financial knowledge.
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