How businesses can get access to finance, by experts
Access to finance at an early stage has been identified as one of the critical challenges facing micro, small and medium enterprises (MSMEs) in Nigeria, now compounded by the impact of the COVID-19. Besides, these enterprises were already struggling long before the pandemic amid the harsh economic environment in Africa’s largest economy.
To this end, the opportunity for impact capital in a COVID-19 era is one of the catalysts needed to ensure Nigeria’s 41.5 million MSMEs survived the pandemic.
These were the words of Project Lead, Impact Investors Foundation (IIF), Maria Glover, at the 2020 IIF Deal Summit, held virtually.
Glover reiterated that MSMEs are the bedrock of the economy, as they account for over 95 per cent of all businesses and contribute over 50 per cent to the economy.
Hit by the twin challenge of COVID-19 and slow economic growth, small businesses in Africa’s most populous nation are now more vulnerable, as constraints in liquidity and cash flow coupled with increased payment delay have resulted in endemic depletion of working capital.
She noted that in addition to the monetary and fiscal stimulus packages from the Nigerian government, joint interventions from philanthropic, private, and public sources are required to cushion the effect of the pandemic.
Funded by the Open Society Initiative for West Africa (OSIWA), this year’s Deal Summit was geared towards contributing its quota in bridging the financing and economic gap COVID-19 may have created.
The summit brought together key national actors to enable access to finance for start-ups with the main objective of promoting job creation and sustainable economic growth.
The event hosted fund managers, impact investors, Development Finance Institutions, and other members of the impact investing community, where about 15 entrepreneurs pitched for access to funds.
They all presented innovative ideas linking various fields to technology. This year’s cohort included companies in digital health and Medtech; food, renewable energy, and Internet of Things.
In his remarks, the Country Director, OSIWA, Jude Ilo, said the economic impact of COVID-19 has been enormous, as small businesses are confronted with a challenging market, which restricts their ability to grow, innovate and compete.
Ilo noted that entrepreneurs and innovators have always fuelled economic growth, and therefore must be supported to invest their energy and ideas to deliver good jobs to boost recovery.
The IIF Chairman, Afolabi Oladele, explained that the summit was an attempt to overcome a key challenge of access to finance, especially in the early stages of business development.
He said the aim of the programme was to strengthen participants’ entrepreneurial skills, to help them to become more investment-ready and able to scale up, while also exposing over 15 investment-ready enterprises to 18 impact investors and accelerating the flow of quality deals within the impact investing community.
This year’s edition, according to him, featured 15 social enterprise owners who participated in a four-week investment-readiness booster delivered by Acumen, an international development organization, to prepare them for possible new ventures.