The economic sector of Nigeria is faced with challenges, yet there are stories of resilience and growth among Small and Medium Enterprises (SMEs).Â
The recent BusinessDay Top 100 Fastest Growing SMEs event, themed “Accelerating Growth for SMEs in an Era of Uncertainty,” shed light on the strategies employed by thriving businesses.Â
Tayo Fagbule, Editor at BusinessDay, representing Frank Aigbogun, the Publisher, welcomed the participants with an emphasis on the significance of SMEs in Nigeria. He noted that they contribute to about 90% of the country’s businesses, but face a challenging environment characterised by global uncertainties, rapid changes, and peculiar local realities. Fagbule encouraged participants to view the event as an “Olympics for entrepreneurship,” celebrating the resilience and achievements of SMEs.
The opening remarks were followed by the keynote speech delivered by Omolara Adewumi, who was represented by Adewumi Oni, the Acting Director of Finance and Corporate Services at Lagos State Employment Trust Fund (LSETF). Oni highlighted the role of SMEs in the Nigerian economy, providing 90% of jobs. He applauded the efforts of the BusinessDay Top 100 in recognising and celebrating these businesses.
Oni touched on the challenges faced by SMEs, particularly the impact of global events on the Nigerian business space. He highlighted inflation, the removal of subsidies, and geopolitical tensions as factors contributing to the uncertainty. Oni then outlined the role of LSETF in supporting SMEs through access to finance, capacity development, and market access programs.
LSETF’s access to finance program, providing affordable loans at 9% per annum, was emphasized as a critical support mechanism for micro, nano, and medium-sized businesses. Oni explained the importance of credit history building through LSETF’s financing, enabling SMEs to later access larger funds from traditional financial institutions.
He also detailed LSETF’s employability program, focusing on skills development for youths between 18 and 40. The tech startup program, offering mentorship and workspace support, aimed to foster innovation in the tech-driven business landscape. Oni highlighted the need for public-private collaboration to accelerate the growth of SMEs, acknowledging the importance of government policies and initiatives.
While discussing the challenges faced by businesses due to global events like the Russia-Ukraine war and geopolitical tensions, Oni stressed the necessity of collaborative efforts between the public and private sectors. He shared insights into the Ease of Doing Business initiatives at both state and federal levels, aimed at creating an enabling environment for businesses to thrive.
Oni concluded his address by expressing gratitude to BusinessDay for organizing the event and congratulating the recognised SMEs. He highlighted the importance of reflecting on the lessons learned from successful SMEs and encouraged participants to use those insights to contribute to Nigeria’s continued prosperity.
The BusinessDay Top 100 Fastest Growing SMEs first panel session, moderated by Satira Osemudiamen, brought together a distinguished group of panellists, each offering insights into the topic: Access to Finance/Sourcing and Raising Finance for SMEs.
They included Adewumi Oni, Ag. Director, Finance & Corporate Services, LSETF; Afolabi Emmanuel, Community Lead B2B, Peppa; Esther Obiekwe, Group Head, SME Banking, Fidelity Bank; Gloria Omereonye, Area Business Executive, Lagos Island 3; Linda Onyesoh, CEO, Milani Cosmetics Nigeria; Nneka Okekearu, Director, EDC, Pan-Atlantic University; Yvonne Ofodile, Managing Director, Zetile Oil & Gas Limited and Yonodu Okeugo, Commercial Leader, VFD Microfinance Bank.
The discussion commenced with an acknowledgement of the economic hardships faced by SMEs in Nigeria. The panellists shared their perspectives on the challenges arising from economic uncertainties. Capturing the essence, the panellists noted: “Nigeria has had a series of economic heartbreaks from issues like the failure period for subsidy, law rate increments, and more, affecting small and medium businesses.”
Adewumi Oni emphasized the importance of preparation before seeking funding. He stressed the significance of a well-detailed business plan, stating, “First, for any SME seeking funding, you must understand the business. Have a business plan that clearly outlines your purpose, capital requirements, expected income streams, and projections.”
Delving into the metrics considered by financial institutions when granting loans, Afolabi Emmanuel, Community Lead B2B, Peppa, highlighted the importance of understanding the structure of the business. “You want to ensure that businesses have a structure, separating personal expenses from business expenses. This includes having proper statements of account and a clear history,” he explained.
Esther Obiekwe, Group Head, SME Banking, Fidelity Bank, added that financial institutions consider the history of the business, especially in the nano and micro space where businesses may lack a credit history. She emphasized the need for due diligence to understand the business’s capacity.
The confusion surrounding different funding sources such as banks, angel investors, and crowdfunding was addressed by Yvonne Ofodile, Managing Director, Zetile Oil & Gas Limited. She stressed the importance of understanding the business’s stage and the type of financier being targeted: “You should be asking yourself, ‘What stage am I as an SME? What kind of financier am I trying to attract?'”
The panelists also explored the role of technology in helping SMEs access finance. Linda Onyesoh, CEO, Milani Cosmetics Nigeria, shared insights on how technology can simplify financial processes: “Using tools like PayPal, Google Sheets, and payroll software can streamline financial management. Even simple technology like Google Sheets can be highly effective.”
Yonodu Okeugo, Commercial Leader, VFD Microfinance Bank, emphasized the importance of technology education, stating that being tech-savvy is crucial for business success in the modern era. He cited examples of businesses using technology for invoicing, bookkeeping, and data analysis to enhance efficiency.
The role of accountants in aiding SMEs, especially those with a limited understanding of technology, was highlighted by Nneka Okekearu, Director, EDC, Pan-Atlantic University. She suggested a phased approach, encouraging SMEs to start by recording financial details and gradually incorporating technology with professional guidance.
The conversation took an interesting turn when a participant raised a question about advising SMEs on leveraging technology for financial bookkeeping. The response pointed to the importance of education in business success.
Linda Onyesoh shared a personal story about her father, emphasizing the indispensability of education. She stressed the need to educate individuals in the market, helping them see the possibilities within their businesses. The importance of business education for women and SMEs was emphasised, with a focus on empowering them to understand and navigate the financial sector effectively.
Esther Obiekwe reiterated this sentiment, highlighting the value of a structured approach to business education. She discussed their initiative, a three-month MBA program for grant recipients, ensuring that SMEs have a clear understanding of financial management before accessing funds.
The discussion touched upon the role of government policies in supporting SMEs. The panellists acknowledged the efforts made by organisations like LSETF and emphasized the need for policies that ease the business environment. Gloria Omereonye, Area Business Executive, Lagos Island 3, stressed the importance of the ease of doing business at both the state and federal levels.
The panellists gave practical advice for SMEs scaling funding challenges in Nigeria’s uncertain economic climate. The linkage of education and funding is a facilitator for sustainable business growth, pointing to the need for SMEs to invest in knowledge and technology for long-term success.
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