BY COBHAM NSA, ABUJA – The Development Bank of Nigeria (DBN) Plc says only Micro Small and Medium Enterprises (MSMEs) with innovative thinking and clear vision will likely survive and sustain their businesses in the post coronavirus (COVID-19) era.
According to the Bank, MSMEs in the country must therefore reinvent their current business models for sustainability and growth in the years ahead.
The Bank also said given the prevalent economic realities of COVID-19 on businesses globally, thinking out of the box is what inventive MSMEs require to leverage on growth opportunities for life after the pandemic.
Arising from a panelists’ discussion at the DBN Webinar session with the theme; “Alternative Financing Options for Sustainable Growth Post COVID-19 Lockdown”, it was stressed that MSMEs have huge tasks at hand if they must take advantage of the new normal that will emerge nationally and internationally.
The Webinar series seeks to provide capacity building and advisory services for MSMEs through digital platforms as a means of empowering them to remain afloat in this trying period.
Among the panelists were: Immediate Past President and Chief Executive Officer of Africa Finance Corporation (AFC) and presently CEO & Partner, South Bridge Group, Mr Andrew Alli; CEO of Emerging Africa Capital, Mrs Toyin Sanni; Head SME, FCMB, Mr. George Ogbonnaya; and MD/CEO, Urban Shelter, Hajiya Sa’adiya Aliyu Aminu.
Moderated by Chief Economist, DBN, Professor Joseph Nnanna, the session, which dissected current implications of the pandemic on Nigeria’s economy, noted that MSMEs remain hardest hit by the crisis, particularly with their limited access to capital as well as dependence on few customer base.
Setting the tone in unveiling post-pandemic era challenges, former AFC Boss, Mr Andrew Alli said; “If you are an SME, the framework should be to survive the crisis period, have as much liquidity as you can and stem expenditure. You must stabilize the business by stabilizing your cost and reconfiguring your operations. For instance, a five-star hotel in Lagos has outsourced their laundry and restaurant. You can now order takeaway and pickup of your laundry.”
“The crisis will end, and we will return to a period of growth. A lot of things will likely change because of this pandemic. So, you also need to prepare for that era. You have to be innovative, have a clear vision, be ahead of the curve to take advantage of the new normal,” he said
Addressing the issue of alternative funfing sources for MSMEs, George Ogbonnaya said investors will be frugal in the post COVID-19 era and will only be attracted to businesses that align purpose with strategic direction.
For him, alternative funding sources will include: Crowd funding; Venture lending; Data driven lending platforms; and Risk-Sharing Guarantees.
In her intervention, CEO of Emerging Africa Capital, Toyin Sanni, urged small business owners to ‘COVID-Proof’ their business, as quality and branded digital presence will stand as distinguishing factors in the present and post COVID-19 era.
“Quality and how you distinguish your brand from competitors will be very important. So, while saving as much as you can during this period, you should also invest in your brand and digitize your business. I would like to use the term ‘COVID-Proof’ for your business.
“Redesign your business such that you are able to do an end-to-end i.e. client acquisition, provision of services, and monitoring and evaluation should involve digital models,” she said.
Offering an advisory, Managing Director, Urban Shelter, Hajiya Sa’adiya Aliyu Aminu, said just like the sector did during the 2015 recession, MSMEs, as key drivers, will be crucial in reviving the Nigerian economy
She urged the Federal Government to reaffirm the made in Nigeria policy to promote local production and patronage while also curbing capital flight after the pandemic.
As a development finance institution, DBN was established by the Federal Government, in collaboration with global development partners, to address major financing challenges facing MSMEs in Nigeria.
The Bank executes this mandate by providing financial institutions, especially Deposit Money Banks (DMBs), Microfinance Banks (MfBs) and other financial institutions, with funding facilities designed to address the needs of MSMEs.
