The Development Bank of Nigeria (DBN) has stated that active collaboration of financial and lending institutions will address the wide funding gaps of about N3 trillion for Small and Medium Enterprises(SMEs).
This is even as DBN disclosed that the financing needs of the Nigerian Small and Medium Enterprises(SMEs) is close to N3 trillion.
According to the bank, the funding need of businesses in the space is so huge that no single development financing institution can fill the gap.
Head of Corporate Services, DBN, Idris Salihu, said, there is a need for collaboration among key players in the financial institutions, noting that active involvement of key stakeholders in the industry would go a long way in addressing the funding needs of SMEs.
He bemoaned the challenges confronting the sector, despite that it potentially constitutes the most dynamic firms in emerging economies, limiting their expansion capacity and impeding development.
Salihu noted that, inappropriate structuring impedes and restricts SME growth potential in Nigeria, adding that, appropriate structuring would grant them access to various funding opportunities from various institutions in the market.
He argued that there are structured and well-outlined business strategies that are missing when SMEs do not get the requisite professional knowledge, which discourages investors from investing in the business.
“No single development finance institution can fill that gap alone and that is the essence of having key players in the industry providing funding for SMEs,” he said.
He added that the accessibility challenge could be addressed through awareness creation that would enable SMEs to know about funding opportunities available in the market.
He further urged SMEs to structure their businesses properly to create an ecosystem that attracts funding from commercial banks and helps ensure business sustainability.
