As the implication of subsidy removal resounds through businesses nationwide, financial experts have rallied Micro, Small, and Medium Enterprises (MSMEs) to seize a unique window of opportunity for enhancing their credit information infrastructure, a move that could pave the way for smoother regulation and improved financing prospects.
At the highly anticipated Fourth Annual MSMEs and Start-up Summit 2023, hosted as part of the Economic Forum Series and situated in bustling Lagos, industry luminaries converged to shed light on vital considerations. The Managing Director and CEO of Bank of Industry (BOI), Mr. Olukayode Pitan, addressed the audience, underscoring the pressing need for MSMEs to bolster their data collection mechanisms pertaining to their businesses.
Represented by Obaro Osah, the Divisional Head of SME-South 2 at BOI, Pitan emphasized the unique context within which many Nigerian MSMEs operate. A significant portion of these businesses follow informal structures, relying heavily on physical infrastructures and cash-based payment systems.
Pitan articulated, “Enhancing the credit information infrastructure and broadening bureau coverage are pivotal steps to counter information asymmetry and heighten transparency within the market. By doing so, we can mitigate perceived risk for investors and alleviate financing costs, which tend to weigh heavier on SMEs in comparison to larger corporations.”
In line with the summit’s theme, “The Role of Alternative Financing and Digital Payment Adoption for MSMEs Sustainability and Competitiveness,” Pitan acknowledged the manifold benefits awaiting businesses willing to traverse the path of digitization in core operational areas.
Offering his insights, Jude Ndu, CEO of The Economic Forum Series, accentuated the inevitability of change and the vital role that thought leadership, innovation, and adaptation play in these transformative times. He remarked, “Change may be inevitable, but understanding and driving innovation amidst change requires a proactive approach. At EFS, we firmly believe that fostering thought leadership and embracing change head-on are central to navigating these shifting tides.”
Echoing this sentiment, he urged MSMEs to diversify their financing approaches, exploring alternative avenues that align with their unique circumstances. Additionally, Ndu emphasized the importance of compiling comprehensive business data, a practice essential for regulatory compliance and access to a spectrum of financing opportunities tailor-made for MSMEs.
Adding to the discourse, Mr. Eli Hini, CEO of Momo PSB Limited, highlighted the burgeoning landscape of competition within the Fintech sphere. He recognized the burgeoning opportunity for MSMEs in this digital era, emphasizing that education plays a pivotal role in unlocking the potential of the solutions at hand. Hini’s vision encompasses bringing financial services to the grassroots through agents’ associations and forging partnerships with local service providers to facilitate seamless interactions for individuals.
Against the backdrop of subsidy removal’s far-reaching impact, this summit has galvanized a collective call to action. MSMEs are being beckoned to fortify their foundations by enhancing their credit information infrastructure, digitalizing key aspects of their operations, and embracing alternative financing avenues that can drive their sustainability and competitiveness in an ever-evolving business landscape.
