SMEs Offer Economy Steady Supply of Innovation—Popoola

By Aduragbemi Omiyale

Small and Medium Enterprises (SMEs) have been described as a critical component of the Nigerian economy because they serve as a principal vehicle for the creation of employment and revenue.

The chief executive of the Nigerian Exchange (NGX) Limited, Mr Temi Popoola, while speaking at an event for small businesses in Lagos recently, stated that efforts must be made to support the sector to keep the economy going.

One of the ways he said SMEs can be supported includes access to funds to help them expand their operations, which will, in turn, stimulate economic activities.

Mr Popoola said small business owners can turn to the capital market to source cheap funds, noting that the NGX Growth Board is a veritable platform dedicated to encouraging small-cap and growth-oriented businesses to leverage the capital market to raise long-term capital, stimulate growth, and promote liquidity.

“We are also working to establish the Technology Board, which will connect technology companies with an extensive pool of investors.

“We are currently working on a slew of innovative approaches to attract capital market funding for the Technology portion of the SME sector as well as less formal ways to attract funding to the sector overall,” the NGX chief said at the 2022 Annual Business Luncheon organised by the Capital Market Solicitors Association.

“SMEs offer the economy a steady supply of ideas, skills, and innovation, which are vital for promoting competition and efficient resource allocation.

“Despite the importance of this sector, it faces material challenges that continue to lead to a decline in productivity.

“Some of these include power supply challenges, substandard trade facilitation infrastructure multiplicity of fees and taxes, and of course, lack of financing,” he further said at the event themed Capital Market, Startup Financing and Syndicate Funding: Ability of Small and Medium-Sized Enterprises to Access the Capital Market.

Mr Popoola restated NGX’s commitment to expanding the Nigerian capital market and providing inclusive platforms for a diverse range of stakeholders, including SMEs, to access capital, stressing that, “It is important that capital markets are able to play a role in catalysing growth within this sector. The launch of the NGX Growth Board in 2019 is in keeping with this commitment.”