Chairman of the Capital Market Solicitors Association (CMSA) Mr Chike Obianwu, says that access to capital is a major challenge of Small and Medium Enterprises (SMEs).
Obianwu said this at the 2022 Annual Business Luncheon of CMSA, which opened on Thursday in Lagos.
The theme of the luncheon is “Capital Market, Start-up Financing and Syndicate Funding; Ability of Small and Medium Sized Enterprises to Access the Capital Market.”’’
In his opening address, Obianwu said that the theme of the luncheon was geared at evolving ways through which SMEs could access capital in Nigeria, like our european counterparts.
According to him, one of the biggest challenges facing the SMEs is access to capital.
Obianwu said that SMEs had formed the backbone of well developed economies, adding that in places like Australia, SMEs have done so well with funding.
“In terms of statistics, if you look online you will see that in a place like Australia, they say that 98 per cent of the businesses there are SMEs.
“One third of the Gross Domestic Product of Australia’s economy is contributed by SMEs and roughly five million people are employed by SMEs, while in the U.S, half of jobs are accounted for by the SMEs,’’ he said.
Obianwu said that the formal economy in Nigeria was where the bulk of our economy lies, adding that statistics may not be one of our “strong suit” in this regard.
“When you talk about SMEs in Nigeria, the biggest challenge you will hear is access to capital, infrastructure challenges, and cost of doing business which is also tied to infrastructure.
“So, how do we deal with that massive challenge of access to capital,’’ he said.
He said that the luncheon seeks to find ways to utilise the instrument of the capital market which presumably provides cheaper capital than taking debts from the bank, to finance development of SMEs in Nigeria.
“We have seen a few examples of initiatives as the Alternative Securities Exchange Market of the Nigerian Exchange Ltd (NGX), we have also seen the growth and the challenges around those initiatives,’’ he said
Obianwu said that there was the need to hear from stakeholders like NGX, to find out what capital market solicitors could do to assist in creating products to enable “capital” meet businesses in need.
He said that it was important to put action to words so that all strategies which would enhance SMEs could come alive and be effective