The International Finance Corporation (IFC) and Bank of Industry (BoI) have collaborated to improve access to finance for Nigerian MSMEs in Nigeria.
Managing Director/CEO, Bank of Industry, Olukayode Pitan, during a trade and supply chain finance workshop in Lagos, said: “We are delighted to partner with the IFC on this laudable initiative towards ensuring that Nigerian businesses are not only able to boost their domestic production capabilities, but also able to partake actively in regional and global value chains for improved trade and economic growth.”
Two IFC reports were also launched at the workshop. The document, based on a survey of about 1,000 MSMEs across Nigeria, identified an unmet demand for credit by Nigerian MSMEs of approximately N13 trillion, equivalent to $32.2 billion.
Some of the reasons attributed for this gap include regulatory constraints and gaps in financial infrastructure, as many financial institutions also perceive MSMEs as too costly and too risky to serve.
According to IFC’s new Supply Chain Finance Market Assessment Nigeria report, MSMEs generate more than half of the Nigerian supply chain finance opportunity, accounting for N1.4 trillion.
The report recommends that the financial industry leverages new technology and innovative business models to improve credit assessment capacity and better serve smaller businesses.
Furthermore, the detailed report proposes that the supply chain finance market in Nigeria can be better met by raising awareness among MSMEs about supply chain finance, capacity-building among financial institutions, front office staff, regulatory enhancements, and increased use of digital platforms.
IFC research shows that improving the availability and cost of trade and supply chain finance could boost trade volumes by 8 percent to 16 percent, supporting economic growth and diversification in Nigeria and other key markets in the region.
