A recent study conducted by Small Firm Diaries and published by the National Bureau of Statistics (NBS) has revealed that 40% of Micro Small and Medium Enterprises (MSMEs) in Nigeria are owned by women. However, the report also highlights that only 12% of MSMEs are co-owned by men and women, with 48% owned solely by men.
The research aimed to understand the role and operations of MSMEs in Nigeria, which comprise 96% of companies and contribute to 86% of total employment in the country. The study analyzed data from 161 firms across light manufacturing, agri-processing, and services in Enugu, Kaduna, and Lagos states.
The study shows that the average annual revenue for MSMEs in Nigeria stands at N2.3 million, with an operating margin of N768,000. However, 62% of MSMEs reported monthly revenue below N300,000, and 47% had monthly revenue lower than N200,000.
Regarding the adoption of the financial system, the report indicates that 97% of MSMEs have a bank account, but less than 50% use it regularly. Only 5% of MSME owners in Nigeria reported using a credit card. Additionally, around 47% of MSMEs owned by men used loans to support their business, compared to 45% of female-owned MSMEs.
The study also delved into the adoption of digital financial services (DFS) among MSMEs, with over 80% claiming ownership of a debit card and 65% utilizing mobile banking services. However, issues related to delayed money arrival and loss of access were reported by 60% and 30% of respondents, respectively, as major problems in using DFS.
When it comes to adopting technology for their businesses, more than 50% of MSME owners cited cost as the major barrier, while 27% mentioned the required skill as a limitation.
Despite the significant role MSMEs play in the Nigerian economy, challenges such as limited access to credit, gender disparity in business ownership, and barriers to technology adoption persist. Addressing these issues could further enhance the growth and development of MSMEs and strengthen the backbone of the Nigerian economy.
