SION develops new SME working model to drive sector
In view of several challenges facing micro-, small- and medium-scale enterprises in Nigeria, experts at the Special Intervention Office of Nigeria (SION) have developed a new and better model that will ensure that players in this sector have better working business environment. The proposed model is targeted at more participation of SMEs in the Nigerian Stock Exchange (NSE) and Alternate Securities Market (ASEM), a second tier market, in order to make operators have better, stable equity funding.
The new model is also proposing the use of efficient technology to close capacity gaps in the sector and ensure that players have improved returns for their investments.
SION was formed by professionals from all walks of life in the country and is intended to use special policy interventions for coherent macroeconomic development in employment, trade, industry, environment, infrastructure, governance, partnerships and social policies in order to bring about inclusive growth.
Derek Omoleh, director-general, SCION, said the new SME working model incorporates the development of entrepreneurial centres to drive the monitoring and technical assistance that SMEs need to grow. According to Omoleh, the new model requires the state and local governments to support the development of SME clusters and cooperatives for the purpose of driving shared services and reduced costs. The model is also targeted at linking Nigerian SMEs with their regional partners to expose them to suppliers across the region as well as other huge opportunities in these markets.
The new SME development policy is expected to have non-traditional transactional products and lending offerings to focus largely on the underserved micro segment of the economy, said Omoleh, adding that the model would promote and implement a unique public-private partnership to develop industrial parks, entrepreneurship centres and incubators, to boost the development of SMEs.
He stressed that the new model incorporates meeting the needs of SMEs using industry leading research and development, while enhancing the corporate governance within the SME segment, with more stringent reporting requirements under the Stock Exchange listings, while providing business owners opportunity to diversify ownership, unlock equity and expand frontiers into various markets.
“ In Nigeria, the lack of capacity and challenges with infrastructure impede SMEs growth and development. Training and advisory are two key areas,” he said, during the official presentation of SION in Lagos last week.
“ The legal structure of financing SMEs cannot work for Nigerians,” he said, adding that the model has become necessary owing to high interest rate and delayed funding.
“ To make SME finance work in Nigeria, lenders need to develop non-traditional methods to evaluate borrowers in the SME market and leverage on clusters like cooperatives and market associations to provide comfort to lenders,” he added.
ODINAKA ANUDU