Financing gap crisis: small businesses struggle to reach full potential

At the 4th Annual General Meeting of the Nigerian Association of Development Finance Institutions (ANDFI) yesterday, the pressing need to bridge the financing gap hindering small businesses from reaching their full potential was highlighted by Charles Odii, the Director General of SMEDAN as a critical step for economic expansion. The event, which saw the participation of key stakeholders including representatives from the Bank of Industry (BOI) and Nexim Bank, centered on the pivotal role of Development Finance Institutions (DFIs) in supporting emerging sectors for growth.

In a compelling goodwill message, it was underscored that small and medium-sized enterprises (SMEs) are essential drivers of job creation and economic growth. However, the Informal Economy Report 2024, recently launched by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) in collaboration with Moniepoint, revealed that a significant number of small businesses still depend heavily on family and friends for financing, which severely limits their potential.

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The speaker called for continued partnership among stakeholders to address this financing gap, stressing that without adequate financial support, SMEs cannot thrive or contribute effectively to the economy. He assured attendees of SMEDAN’s commitment to mitigating risks in the SME sector, advocating for favorable regulations, and working towards the formalization and optimization of small businesses for investments and growth.

This meeting emphasized the necessity of strategic collaborations and innovative financing solutions to empower small businesses, thereby fostering a robust and inclusive economic environment in Nigeria.