By Onome Amuge/Rosemary Iwuala
Nigerian micro,small and medium enterprises (MSMEs) have an unmet demand for credit of approximately N13 trillion, equivalent to $32.2 billion, according to a recent report published by the International Finance Corporation (IFC).
Based a survey of about 1,000 MSMEs across Nigeria, the corporation in its report titled “Market Bite Nigeria:Innovation Offers Key to the Broader MSME Finance Market,” attributed the deficit in finance to regulatory constraints and gaps in financial infrastructure, adding that many financial institutions also perceive MSMEs as too costly and too risky to serve.
The report also stressed that the supply chain finance market in Nigeria can be better met by raising awareness among MSMEs about supply chain finance, capacity-building among financial institutions, front office staff, regulatory enhancements, and increased use of digital platforms.
According to the report, improving the availability and cost of trade and supply chain finance could boost trade volumes by 8 percent to 16 percent, supporting economic growth and diversification in Nigeria and other key markets in the region.
In another report titled; “Supply Chain Finance Market Assessment Nigeria,” the IFC noted that MSMEs generate more than half of the Nigerian supply chain finance opportunity, accounting for N1.4 trillion, about $3.5 billion.
Commenting on the reports, Kalim Shah, IFC’s senior country manager for Nigeria, Liberia and Sierra Leone, said strengthening supply chains and trade flows through additional finance could set the stage for faster growth, economic diversification, and poverty reduction in Nigeria.
“We are glad to present these new reports with data and insights to encourage further investment to close the MSME finance gap,” Shah added.
Meanwhile, the International Finance Corporation recently established a partnership with the Bank of Industry (BoI) to strengthen trade and boost access to finance for MSMEs in Nigeria.
Olukayode Pitan, the managing director/chief executive officer, BoI, made the disclosure during a just concluded trade and supply chain finance workshop in Lagos.
According to Pitan, Nigerian MSMEs account for about 86 per cent of employment and contribute 50 percent of nominal gross domestic product (GDP), but receive significantly less finance from the private sector than is the average in sub-Saharan Africa.
The BoI chief expressed delight partnering with the IFC on the initiative towards ensuring that Nigerian businesses are not only able to boost their domestic production capabilities, but also able to partake actively in regional and global value chains for improved trade and economic growth.
