The Development Bank of Nigeria Plc (DBN) has advised Micro Small and Medium Enterprises (MSMEs) to reinvent their business models.
He said this would enable the MSMEs to be sustainable during the COVID-19 pandemic and “to enable them leverage growth opportunities for their businesses in the post COVID-19 era”.
He stated this during the DBN Webinar session, with the theme “Alternative financing options for sustainable growth post COVID-19 lockdown”.
Panelists include: immediate past President/Chief Executive Officer Africa Finance Corporation and CEO & Partner, South Bridge Group, Mr. Andrew Alli; CEO, Emerging Africa Capital, Mrs. Toyin Sanni; Head SME, FCMB, Mr. George Ogbonnaya; and MD/CEO, Urban Shelter, HajiyaSa’adiya Aliyu Aminu.
The session was moderated by Chief Economist, Development Bank of Nigeria, Prof. Joseph Nnanna.
The panelists lamented: “MSMEs are the hardest hit by the crisis, as they have limited access to capital and now have to depend on few customer base.”
They however, stressed that “only SMEs with innovative thinking and clear vision will be able to take advantage of the new normal.”
According to Andrew Alli “if you are an SME, the framework should be to survive the crisis period, have as much liquidity as you can and stem expenditure.”
He added that MSMEs “must stabilise the business by stabilising your cost and reconfiguring your operations.”
According to him, “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.”
Alli also noted that “a lot of things will likely change because of this pandemic. So, you (MSMEs) also need to prepare for that era. MSMEs have to be innovative, have a clear vision, be ahead of the curve to take advantage of the new normal.”
On alternative sources of funding for MSMEs, George Ogbonnaya stated that investors will be frugal in the post COVID-19 era and will only be attracted to businesses that align purpose with strategic direction.
He listed alternative sources of funding to include: Crowdfunding, Venture lending, Data driven lending platforms and Risk-Sharing Guarantees.
On her part, Toyin Sanni admonished 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.
According to her, “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.”
By ‘COVID-Proofing’ businesses, Toyin Sanni called on MSMEs to “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.”
As an advisory, Sa’adiya Aliyu Aminu said being the major drivers, MSMEs will be crucial to reviving the Nigerian economy just like the sector did after the 2015 recession.She called on the Federal Government to reaffirm the made in Nigeria policy to promote local production and patronage and curb capital flight after the pandemic.
