By TAIWO HASSAN
Nigeria’s s economic headwinds coupled with the various economic policies of past administrations have made it difficult for businesses to thrive in the country.
For the private sector operators, the situation has affected the growth of their investments. As a result, the organised private sector (OPS) has been worried about how the Small and Medium scale Enterprises (SMEs) owners will remain in business for long.
Ideally, SMEs are critical to economic development, especially with the creation of jobs and promotion of inclusiveness in the Nigerian economy.
However, funding SMEs remains a major challenge in Nigeria.
Statistically, almost 80 per cent of small business owners self-fund their start-ups through savings, family, friends, or credit facilities.
While these sources are relatively easy to obtain, at a certain point, additional funds may be needed for expansion. This is where long-term debt is an option for growth and development of their businesses.
Additionally, small business owners are constantly faced with deciding how to finance the operations and growth of their businesses with the question; do they borrow more money or seek other outside investors?
However, in order to ensure that indigenous operators have the wherewithal to strengthen their businesses, the LCCI took a bold step recently to the capital market to discuss possible funding for local investors.
President, LCCI, Babatunde Paul Ruwase, while meeting with the management of the Nigerian Stock Exchange (NSE), highlighted the importance of the two organisations towards developing the Nigerian economy through mobilisation of capital for investors, especially the indigenous ones.
At the NSE, the LCCI president said the chamber was seeking collaboration in making long term funds available to local investors.
“It is our belief that the Nigerian Stock Exchange and the Lagos Chamber of Commerce and Industry are major stakeholders in the Nigerian Economy.
“We have a lot to do together to promote private sector development and the advancement of the Nigerian economy. We seek collaboration with the Nigeria Stock Exchange in making this happen,” Ruwase stated.
Areas of interest
Speaking further, the president of the LCCI explained that the costs of fund in money market as well as tenure of funds were not in tune with the yearnings of investors, especially those with long term perspective.
According to Ruwase, this has constrained the growth of key sectors including agriculture, manufacturing, property, construction, infrastructure etc.
He noted that all these sectors needed affordable long term funds, adding that the capital market window naturally provide the good option for funding of such investments.
“We would like to see a better impact of this funding window. There is also need to collectively strengthen advocacy to make pension funds available for long term financing needs of the economy,” he said.
“We should also work together to explore options of financing of small businesses. As in many other economies, SME’s are critical to economic development especially the creation of jobs and the promotion of inclusiveness in the Nigerian economy.
“Funding SMEs remains a major challenge in our economy. It has been difficult to unlock the potential in the sector partly as a result of this problem.
“We would like to partner with the NSE in the promotion of good corporate governance and scaling up of business ethics. We are concerned about the deterioration of values of trust and integrity in business practices.”
Source: New Telegraph
By TAIWO HASSAN