MSMEs have less than 50% active bank accounts – Study

According to a recent survey by Small Firm Diaries (SFD), less than half of Nigeria’s micro, small, and medium-sized businesses (MSMEs) routinely use their bank accounts. SFD is a global, multi-country research program that gathers data from seven countries in Latin America, sub-Saharan Africa, Southeast Asia, and the Pacific to shed light on the financial operations of small enterprises.

In spite of the fact that 97% of MSMEs in Nigeria had bank accounts during the data collection period between August 2021 and August 2022, less than 50% of MSMEs regularly used their bank accounts, according to the Nigeria Country Data Overview of the SFD report, which was published on the website of the National Bureau of Statistics (NBS).

The purpose of the study was to better understand the function and operations of MSMEs, which account for 96% of all enterprises and 86% of all jobs in the nation.

According to the report, MSMEs in Nigeria generate an average of N2.3 million annually, with an operating margin of N768,000. The report went on to say that 62% of MSMEs had monthly revenues below N300,000, and 47% had monthly revenues below N200,000.

The study also revealed that 45% of MSMEs owned by women utilized credit facilities, compared to 47% of MSMEs owned by men, who took loans to sustain their businesses.

Regarding the use of digital financial services (DFS), more than 80% of MSMEs claim to have a debit card, 65% claim to have used mobile banking, and 56% claim to have used point-of-sale (PoS) terminals. However, just 5% of MSME owners in the nation claimed to have used a credit card.

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When asked about the difficulties they had using DFS, 60% responded that money arriving late was the biggest issue, while 30% complained that losing access and missing money were the worst issues.

A little over 63% of research participants said they used DFS because they were getting paid via the platform.

More than 50% of MSME owners feel that cost is the biggest obstacle to using technology in their companies, while roughly 27% say that the skill set needed is the barrier.