Undoubtedly, Micro, Small and Medium-size Enterprises (MSMEs) play critical roles in the global economy.
They account for more than 90 per cent of all businesses and around 70 per cent of jobs worldwide. In Nigeria, there are about 41.5m MSMEs, comprising at least 41.4 million micro enterprises; and 73,081 small and medium enterprises.
Together, they are responsible for 59.6 million jobs, which represent 86.3 per cent of the national workforce and also contribute about 50 per cent of the nation’s Gross Domestic Product (GDP).
Operating everywhere, MSMEs stimulate economic growth and provide employment for large sections of society, including women, young entrepreneurs, and poor communities.
The importance of this category of businesses, despite the challenges of access to finance, value chains and markets, has made them the most viable options for addressing some of Nigeria’s most pressing social and economic problems.
Adopting this strategic thought, the senator representing Lagos East, Mr. Tokunbo Abiru, recently provided a platform for MSMEs to address the challenges of access to finance, capacity and sourcing for customers to encourage creativity, innovation and reduce unemployment especially among youths.
Abiru, who is the Chairman, Senate Committee on Industries, at a capacity development training for 1000 MSMEs in the Lagos East Senatorial district, highlighted the critical roles MSMEs play in the nation’s economic development.
The lawmaker said the training was to enhance the capacity of micro, medium and small business owners in the senatorial district to scale, adding that lack of capacity had been identified as one of the major reasons MSMEs fail.
Among leading industry personalities at the one-day MSME Clinic/ Workshop that was organised in conjunction with The Fate Foundation were the Managing Director, Bank of Industry, Mr Olukayode Pitan; The Executive Chairman, Lagos State Inland Revenue Service (LIRS) Mr Ayodele Subair; Executive Secretary, Lagos State Employment Trust Fund, Mrs Tejumola Abisoye, officials from the Small and Medium Enterprise De velopment Association of Nigeria (SMEDAN) led by the agency’s Director of Planning Research, Monitoring and Evaluation, Mr Wale Fasanya and a team from the Standard Organisation of Nigeria (SON)led by the Head of SME Desk, Mrs Phebean Arumemi and renowned business consultants.
Highlighting the critical roles MSMEs play in the nation’s economic development, the Senator said: “MSMEs account for the majority of businesses worldwide and are important contributors to job creation and global economic development.
They represent about 90 per cent of businesses and more than 70 per cent of employment worldwide.” “Formal SMEs contribute up to 40% of national income (GDP) in emerging economies. These numbers are significantly higher when informal SMEs are included.
The latest SMEDAN/NBS MSME Survey indicates Nigeria’s SMEs contribute nearly 50% of the country’s GDP and account for over 80% of employment in the country.
“It has been projected by the World Bank that about 600 million jobs will be needed by 2030 to absorb the growing global workforce, which makes SME development a high priority for many governments around the world. In emerging markets, most formal jobs are generated by SMEs, which create 7 out of 10 jobs,” Abiru told the participants.
Abiru said it was therefore instructive to assist the struggling businesses who were mostly impacted by the devastating COVID-19 pandemic with workable business solutions in the new normal world.
The senator said that the knowledge pack, a combination of seven books written by foremost experts which participants got for free, are reference materials for now and future, adding that their contents are the secret of success of most major businesses.
To the admiration of participants and dignitaries that graced the occasion, the Senator announced the launching of a N100m soft business loan support to train MSMEs with working capital, as well as asset finance for equipment acquisition at highly subsidized interest rates.
The N100 million constituency intervention revolving facility which be executed in partnership with the Small and Medium Enterprises Development Agency (SMEDAN) has a minimum limit of N100, 000 and a maximum of N1 million with as low as 6 per cent interest rate with a flexible repayment plan from 1 to 12 months starting from Q1, 2022. The senator mulled plans to increase the revolving facility in the same sum on a yearly basis.
Also speaking, a former Lagos State Commissioner of Finance and Governor’s Advisory Council member, Mr Olawale Edun applauded the gesture of Senator Tokunbo Abiru describing the business aid as a great initiative. Also, a former Minister of Works, Senator Adeseye Ogunewe urged other elected public office holders to learn from the giant strides of Abiru.
The former minister, who accompanied Senator Abiru on touring business clinic consulting desks, urged participants to place a premium on the knowledge they had acquired in the course of the workshop and business clinic.
On his part, the CEO/Managing Director of the Bank of Industry (BoI), Mr Olukayode Pitan, said it was becoming more difficult nowadays in the country for average Nigerians to get people that will stand as guarantors for them to obtain loans from money lenders including banks.
According to Mr Pitan, funding is one of the major issues in business anywhere globally and the requirement to access loans from the Bank of Industry for example is very simple.
While commending Abiru, he said sharpening the knowledge and skills of MSMEs particularly in large numbers such as the one by the foundation and at this era of COVID-19 crisis would greatly help participants grow their businesses to financial freedom.
Clearly, Abiru’s intervention has addressed the primary challenge of access to finance for MSMEs in Lagos East, but how this will be replicated across the other senatorial districts and the country at large, is left to be seen.