Investing in SMEs in Nigeria to support economic growth
The current rising rate of inflation, the slowdown in growth rate, and other pressures bearing down hard against the Nigerian economy speak to the realities of the times we are living in.
Further, the closure of over 50 bakeries in Abuja due to a rise in the cost of operations and the inability to meet their financial responsibilities paints a more vivid picture of the situation. A harsher reflection of this reality can be viewed through the prices of common goods and food items that have literally gone through the roof.
However, amidst these challenges, some resilient operators – retail entrepreneurs are trying to weather the headwinds and make things happen. The retail industry caters to over 25 million people who make a living from it.
Studies indicate that women account for 41% in terms of business ownership within this segment is estimated to be worth $100 billion. In the last five years, SMEs in Nigeria have contributed 48% of the national GDP. These data speak to the importance played by the retail economy in the country.
Access to capital, increasing brand visibility, driving traffic for goods and services, and infrastructural bottlenecks associated with order fulfilment and last-mile delivery are some of the major challenges that confront retail entrepreneurs in Nigeria.
Aware of the important role financing plays in driving retail trade, various financial institutions and fulfilment service providers are providing credit to players in the retail economy to enable them to sustain and grow their businesses.
Sendy, a tech company that builds a fulfilment infrastructure for e-commerce and consumer brands, is democratizing trade across the continent. With operations in Nigeria, Côte d’Ivoire, Uganda and Kenya. The company is revolutionizing retail distribution by providing a platform that allows retailers to purchase stock at competitive prices from multiple suppliers in real-time.
Through the platform, retailers can also get financing to enable them to restock their businesses. This is now enabling retail players to source goods at affordable prices, optimize their profitability and reduce losses occasioned by-product unavailability.
In a past media interview Wale Adisa, Sendy, General Manager, English West Africa said “Sendy Supply provides a platform that enables businesses to purchase stock at competitive prices from multiple suppliers/manufacturers. We also provide advanced credit and flexible financing to enable businesses to buy stock and meet customers’ shopping needs. Through the platform, we are helping general retailers to grow and do more by picking and shipping the stock from suppliers to their stores within 24 hours so that they can spend more time growing their businesses.”
Sendy also organizes masterclasses where business owners learn how to deploy digital communications more productively, connect with their target audience and communicate their unique selling propositions. This is a smart way to empower businesses.
Across the continent, Google has also been very committed to helping small businesses grow. Its Shop Small Summit, an e-commerce-focused virtual event aimed at helping small business owners improve their knowledge of eCommerce trends in Sub-Saharan Africa is another example.
In June, Google partnered with Sendy in an initiative aimed at empowering Africa’s small and medium businesses. The program, dubbed Google Hustle Academy, seeks to provide MSMEs across Kenya, Nigeria and South Africa with expert training on business strategy & development, digital marketing, and financial planning.
In many economies, a rise in inflation affects operation costs for many SMEs. These include logistics, warehousing, distribution etc. However, business owners still need to be able to manage their daily activities, including deliveries to customers across the country.
In a bid to help small businesses resolve this challenge, fulfilment platforms like Sendy come to the fore, in facilitating storage, movement and distribution while the business owner can focus on enhancing customer experience, improving product quality and growing the business.
“Logistics is the foundation of easier trade in Africa and Sendy has invested heavily in it from both a tech and operations perspective. From a tech perspective, the company has redesigned its systems to ensure the proper handling of not only present traffic, but also future traffic. We have strategic partnerships with logistics providers, consumer goods suppliers, financial institutions, payment networks, warehouse providers and regulators in all countries we operate in,” Wale added.
For the Nigerian economy to continue soaring, SMEs need a lot of support. They are critical drivers of growth and sustainable development across many countries on the continent. It is important to continue investing in them to develop their potential and capacity.
Ireyimika Oyegbami is a freelance journalist and lives in Lagos