MSMEs the drivers of the Economy
The Small and Medium Scale Enterprise Development Agency of Nigeria (SMEDAN) says that MSMEs currently represent 96% of the businesses in Nigeria and contributes 75% of the national employment. Of the 17.2 million MSMEs in Nigeria over 17 Million are micro-enterprises. Thus, the growth in this sector is directly correlated with the growth in the economy and in curbing unemployment in Nigeria.
However, a number of challenges are inhibiting the potential of MSMEs in Nigeria. Prominent among these challenges are (a) Very low access to affordable finance (b) Poor access to Business Development Service (BDS), and (c) Inadequate infrastructure/high cost of doing business. Despite these, it has not deterred MSMEs from contributing to Nigeria’s economic growth. Here are a few ways MSMEs are doing this:
Encourages entrepreneurship
MSMEs
are the product of the business owner’s entrepreneurial spirit. By
starting a small business, the business owner is taking charge of his or
her future. Entrepreneurship fuels Nigeria’s economic innovation and
prosperity and serves as a key means for families to move out of
low-wage jobs and into the middle class. Hence, there is no need to wait
for the government’s empowerment programmes. You can empower yourself
by leveraging on digital technology to start a business
Local jobs
Small
businesses are job creators despite the many challenges they face. They
have enabled a certain cadre of Nigerians to earn a living. A company
that supports these MSMEs is Jumia . Jumia, Nigeria’s no 1 shopping
destination via, Jumia Lending, has supported the millions of vendors
selling on its platform with small loans and ensuring that they are run
smoothly without any hiccups. Jumia lending gives small businesses the
opportunity to grow and expand their businesses by granting vendors
access to fast and easy short-term capital. With this capital, these
vendors are able to employ more hands thus creating more jobs and the
society will be better for it.
Innovation and competition
Small
businesses, like any business, need to stand out from the crowd in
order to survive. They must serve a legitimate need in Nigeria and do it
better than their competitors. Having multiple small businesses all
striving to be unique, innovative, and better can result in a healthy
marketplace and well-served consumers.
Investing in products and services people need
What motivates a person to start a new business? Small businesses create new businesses in response to unmet needs and demands in the market. That is, there is an opportunity to provide a product or service that is not currently in existence, or otherwise available.
New technologies promote efficiency
The
ability to turn ideas into new products and services that people need
is important in a developing country like Nigeria. This is driven by new
technologies and creative applications. With more and more small
businesses embracing technology to boost service delivery, they have
positioned themselves to earn more revenue and contribute to the growth
of the economy.
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