FirstBank has emphasised the need for Small Medium Enterprises (SMEs) to build resilience in diverse sectors of the economy to address external shocks that may eventually undermine business inventories, supply chain networks and financing models to impact SMEs in the area of growth.
This is even as the financial service stakeholders explained that, despite the constant level of environmental uncertainties, SMEs develop strong survival instincts and engage in behavioural patterns that enable them to thrive even in difficult business climates.
Speaking at a webinar session with the theme; ‘The power of Resilience, Building A Strong Business in Times of Uncertainty,’ stakeholders affirmed that, SMEs are bedrocks of the nation’s economy contributing 50 per cent to nation’s gross domestic product (GDP) through the creation of employment among indigenous entrepreneurs while impacting 73 per cent of industrial jobs.
Speaking at the SME connect Webinar session organised by First Bank, group head, Retail Banking, South Africa, First Bank, Mrs Dolapo Adigun explained that businesses need to improve their resilience in times of crisis to build sustainable development in infrastructure delivery for SMEs, entrepreneurs and micro managers.
Adigun advised Small and Medium-sized Enterprises (SMEs) to see opportunity in adversity and make good use of it to stay strong in business.
Adigun stressed the need for SMEs to deliver its capacity-building pillar of its value propositions, adding that the initiative focuses on impacting SMEs in areas that affect their business growth and development.
Adigun said: “Nigeria is a blessed land. We have the potential, we have over 200 million people, we are said to be the most populous and in population, we have the market and it’s a growing large consumer base.
“So, there is immense opportunity for SMEs; and with the growing middle class and increasing opportunity, we need to tap into it as an SME.’’
Adigun named some of the challenges SMEs faced to include infrastructure, regulatory environment, informal economy like those that are not exposed to education, rising inflation, petrol subsidy removal, currency devaluation, foreign exchange rate, among others.
She said these challenges, like uncertainties, would always happen in business as they are norms in the business world and in everyday life.
Adigun urged businesses to plan and maintain a long term loan, financial management, prioritise strategic partnership, strengthen customer relationship, adjust business model and enhance operational efficiency, among others.
She also said that most of the challenges and uncertainties that businesses in Nigeria go through, Firstbank had gone through it and yet still standing.
She said that the bank had carried out a dynamic adjustment of its operations, structure and system, adding that it was still reviewing its process.
She said SMEs are more likely to experience catastrophic sales decline, closing of shops, dearth of skills, lack of continuity which reflects their inherent vulnerability.
Particularly, Adigun noted that the small and medium enterprises (SMEs) are at higher risk of failure than large firms because of their limited resources and capabilities to handle external shocks.
She affirmed that the widespread failures amongst SMEs could generate unemployment and lead to disruptions of large firms relying on them and this could have a ripple effect on the economy given their roles and prevalence in diverse sectors of the economy.
She charged the Telco companies to strengthen non-bank retail channels for SMEs to operate seamlessly and transact business deals while addressing the need for the financial services sector to improve financial services for those marginalised from the traditional banking system.
While highlighting the need for SMEs to build resilience business in times of uncertainty, she encouraged businesses to adopt digital learning opportunities to combat inherent vulnerabilities to withstand shocks and unfavourable events that may pose disruptive challenges to the SME sector.
Also speaking, chief growth officer, WhoGohost, urged the participants to find unique ways to solve the challenges that hard times had thrown on their businesses.
According to him, this is what WhoGohost did to stay resilient in business.
“Resilience is the capacity to withstand or to recover quickly from difficulties and toughness. For us (WhoGohost) to be stable, we built a product that will allow us to earn in dollars and that was what we did with Muzu.co, a website builder, that allows people to create websites quickly for themselves,’’ he said.
He, therefore, urged business owners to build resilience by innovating and pivoting.
He advised that, if a particular business strategy was not working, they could look for other ways to create products that would allow them to earn quick money as revenue was the lifeline of every business.