‘How SMEs can access funding opportunities, list on Nigerian Stock Exchange’

Experts have stressed the need for Small and Medium Enterprises (SMEs) under the agro-allied sector to form cooperatives where smallholders farmers will be aggregated for easy accessibility of funds and subsequent listing on the Nigerian Stock Exchange (NSE).

Speaking at a webinar organised by the NSE, themed: “Capital Raising for SMEs through the Stock Exchange,” the experts said such cooperatives would help reduce the relatively high transaction cost small holders face, overcome access barriers to production resources and ultimately create a robust platform for them to list on the exchange.

They bemoaned the challenges confronting the SMEs sector in Nigeria, despite that it potentially constitutes the most dynamic firms in emerging economies, limit their expansion capacity and impede development.

However, they noted that SMEs on their part must structure their businesses to attract the funding needed to expand their operations.

The Head, Wholesale Banking, Cowry Asset Limited, Nathan Nwokoro, said considering the attractiveness of SMEs, especially those in the technology sector, access to funding should not be a barrier to their growth in Nigeria.

He noted that this also impedes their ability to list on the Exchange, restricts their economic prosperity and growth potential in Nigeria, adding that appropriate structuring would grant them access to various Generator set funding opportunities from institutions such as the NSE to enhance business growth.

He said there are structured and well-outlined business strategies that are missing, which discourage investors from investing in SMEs Nwokoro said: “The issue of lack of funding in SMEs should not even exist given the attractiveness of the sector especially the technology firms. The sector contributes 50 per cent of GDP and generates up to 90 per cent of employment.

“But the major challenge of SMEs with reference to listing is their inability to structure their businesses. Most of the SMEs do not have clarity, they do not know what they want to do, and investors cannot stake their funds in businesses that do not have the right kind of structures.”

The Managing Director, Dala Foods Limited, Ali Madugu, stressed the need for the government to support the entire agricultural value chain to boost food production in the country. According to him, every sector in the value chain must be given the deserved attention; from production, good seedlings, harvest, storage, good handling practice, agro-processing and market access.

He said: “We must enhance the entire value chain to boost food production. “In the area of funding, the NSE has a lot to do. The exchange should liaise with the commodities exchange on the issue of sourcing of raw materials to where farmers can stock after harvest to enable farmers to access it with ease and under a control system.”