UNCTAD, FRC empower SMEs with financial literacy tools

The United Nations Conference on Trade and Development (UNCTAD) in partnership with the International Standards of Accounting and Reporting (ISAR) and Financial Reporting Council (FRC) has equipped small and medium-sized enterprises (SMEs) with tools to address challenges such as poor financial documentation and limited access to financing.

This was done when the institutions organised a one-day train-the-trainers workshop on accounting and financial reporting in a bid to support SMEs and drive Nigeria’s economic sustainability.

Chief Executive Officer of FRC, Rabiu Olowo, said the workshop was aimed to equip trainers with tools to improve SME financial literacy, promote formalisation, and strengthen corporate reporting practices.

He said SMEs account for 90 per cent of businesses in developing countries and play a vital role in economic growth, yet many in Nigeria face challenges such as poor financial documentation and limited access to financing.

Olowo emphasised that SMEs are central to the council’s plans and vision for promoting sustainability in the financial sector. The workshop, he noted, aligned with President Bola Ahmed Tinubu’s economic goals and recognised SMEs as pivotal to driving economic growth.

He noted that the workshop agenda focused on four key areas, which include, identifying professionals to train SMEs, and addressing misconceptions that formalisation equates to excessive taxation.

Others are enhancing SME financial documentation for sustainable growth and strengthening the regulatory framework by creating a supportive environment for SMEs.

One of the facilitators, Oladele Oladejo, highlighted the importance of formalising the informal sector, dispelling the notion that formalisation only leads to increased tax burdens. He emphasised that formalisation opens doors to sustainability, better financial management, and improved access to credit.

“Formalisation is not about taxation; it is about growth. SMEs need the tools to manage their finances effectively to strengthen their operations and contribute more significantly to the economy,” Oladejo stated.

Representative of UNCTAD, Elena Botvina, presented the Accounting Development Tool (ADT), a diagnostic framework that assesses a country’s capacity for high-quality financial reporting.

Botvina explained that the ADT helps policymakers identify reform priorities, track progress, and foster collaboration among stakeholders. She said the workshop provided trainers with simplified financial reporting practices to guide SME owners with topics including preparing basic balance sheets, understanding liquidity versus profit, and separating personal and business expenses.

Another facilitator, Olasunkanmi Ayinde, highlighted a common issue among SMEs such as blending personal and business finances.
“Entrepreneurs often fear formal documentation because of perceived tax implications. They channel cash flow into personal accounts, not realising this undermines their credibility and access to credit,” he said.

Ayinde stressed the need for accurate financial statements to build trust with financial institutions, enabling SMEs to secure loans and scale their businesses. He said these trainers will bridge the knowledge gap by helping SMEs understand the benefits of financial discipline and transparency, repositioning formalisation as a step toward long-term success.