A new report by the National Bureau of Statistics ( NBS) says the revenue and expenditures of small businesses in Nigeria are highly volatile thus making effective management of the firms difficult.
The report also shows that only 8% of female owned firms and 12 percent of males owned firms were unbanked.
The NBS in the report titled: Small Firms Diaries Report, launched yesterday in Abuja, said the total monthly revenues from the sample of small firms interviewed reportedly ranges between less than one to N54 million, with 75 percent of the small firms reporting revenues of N440,000 or less monthly.
The report also indicate that the monthly expense distribution across the sample firms was just as wide as that of their revenues, ranging from N3,200 to N16.6 million, with half of the firms having a median monthly expense of N87,000 or less, and around 75 percent having a median monthly expense of N256,000 or less.
According to the report, women firm owners and men firm owners use their bank accounts at a similar frequency. The average women-owned firm conducts 45 percent of total transactions using bank accounts while men owned firms conducts only 40 percent of their transactions through their bank accounts.
The report also shows that a similar proportion of women and men firm owners took loans, 45 percent and 47 percent respectively. “However, women business owners are averse to risk by taking lower value loans than men, N57,000 compared to N93,000 by men. Across both genders, cost of credit (interest rate) was the most frequently cited barrier to credit,” the report said.
Statistics General of the Federation and Chief Executive Officer of NBS, Prince Adeyemi Adeniran in his speech at the launch said the survey which started in 2021 was done in partnership with the Gates Foundation and New York University (NYU).
He said The importance of small firms, or Nano, micro small and medium enterprises (NMSMEs) to the growth and success of the Nigerian economy, cannot be over-emphasized.
Quoting the results from NBS NMSME Survey conducted in 2020 Prince Adeniran said that over 49.8 percent of the economy is attributed to contributions from NMSMEs, while over 65 percent of employment within the labour market comes from them.
“Given these numbers, there is little wonder as to why MSMEs remain the focus of many governments across the globe, including ours in Nigeria,” he said. “With a growing population that is heavily skewed towards a younger demography, the critical role of small firms to the survival and prosperity of economy and national life, both in the present and future, can only expand and continue to grow.”
He said any effort geared towards understanding the nature and behaviour of these small firms – how they operate, their financial structure and make-up, how they make decisions, the labour input they engage, their aspirations for growth and expansion, if any are extremely valuable, and a worthwhile pursuit, noting that that is why the NBS was involved in the project.