The fall of SMEs in Nigeria

 By Paul Ikele

There is an array of perennial problems facing businesses today in Nigeria like unstable electricity, lack of encouragement from the government, corruption, multiple taxation and lack of infrastructure.

Other causes range from lack of business knowledge, poor record keeping, poor attitude of employees and entrepreneurs, bad marketing and lack of plan for the business.

Today in Nigeria, Small and Medium Scale Enterprises (SMEs) has suffered and are still suffering from the aforementioned problems.

It is noteworthy that the SMEs contribute immensely to the economic growth of the Nation, this is certainly impossible to debunk regardless of the challenges.

The Government, Individuals and Corporate bodies are pathetic about the sorry state of SMEs in the Country but none has brought a lasting solution to its problems.

This concern is what necessitated the Small and Medium Enterprise Equity Investment Scheme (SMEEIS) by the Bankers Committee of CBN.

Under this dispensation loans were made available to Small and Medium Entrepreneurs but on a high rate of interest and on a short time. There is also the issue of collateral; which cannot be produced by many entrepreneurs.

 A report on Vanguard Newspaper shows that N55 billion was supposedly set aside to invest in SMEs but only about N28 billion was actually invested. This gap could be traced to a lot of factors which include but not limited to:

·       Entrepreneur’s capacity

·       Multiple Taxation

·       Failure to make and implement Business Plans     amongst others

Government was particularly talking about disbursement of funds which led to the mismanagement and inadequate review and monitoring of projects.

There was no proper record keeping thus, the SMEs  failed. It was a new policy that Nigeria found so hard to manage. 

SME entrepreneurs would have been doing better without the banks demanding so much interest and the tax administrators coming in shortly after.

THE WAY FORWARD

Nigeria needs a viable policy for SMEs. We must watch out for those things that hampered the success of the first scheme. We need infrastructures.

Entrepreneurs should have a Business Plan and implement them. They also need knowledge of Business Development.

Business Development and strategies business planners are now actively involved in assisting entrepreneurs meet desired goals. 

Paul Ikele, the Registrar/CEO of Institute of Business Development-Nigeria could be reached on 2348034520370