Nigerian small businesses lack finance to meet their international ambitions – ACCA
By Chioma Obinagwam
Given the right opportunities Nigerian small businesses are very likely to participate in international trade, but are struggling to access the necessary finance, according to new research.
Growing globally, a report from ACCA (the Association of Chartered Certified Accountants) surveyed small and medium sized businesses (SMEs) and accounting practices around the world to identify levels of participation in and appetite for international trade.
“Internationalisation can potentially bring a range of growth benefits for both small businesses and the broader economy, whilst also driving productivity,” explained Ben Baruch, head of SME policy at ACCA.
“It’s encouraging that so many Nigerian businesses have the appetite to internationalise, but small businesses need to ensure they have access to the right professional advice and support to do so successfully. Almost a third (31%) of respondents identified a lack of access to external finance – such as export finance – as a barrier to successful internationalisation,” he noted.
“Financial literacy is essential for entrepreneurs to run their businesses effectively, efficiently and profitably. It also enables them to financially plan, manage their finance function and access external funding. More support needs to be provided by the Nigerian Government to ensure business owners are equipped with key financial literacy skills. This in turn will improve Nigerian SMEs’ ability to obtain external finance and help them grow sustainably,” he added.
The report also provides some recommendations for small businesses looking to expand their international capability, including embracing cloud technologies, developing the scalability of the finance function, creating a business strategy with global ambitions and identifying where external advice could support internationalisation.
“Accountants – and particularly small-to-medium sized practices (SMPs). which we focus on in Growing globally – are one of the most useful resources for supporting small businesses across all of these areas,” concluded Baruch.
The survey further disclosed that 86 per cent of the Nigerian small businesses surveyed, participated in international trade, compared to a global average of 77 per cent.
However, more than half (55%) called for better access to export finance.