SMEDAN: 40 MILLION NIGERIAN SMEs EXIST, MOST ARE INVISIBLE TO THE FINANCIAL SYSTEM

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Nigeria has an estimated 40 million micro, small and medium enterprises, but most of them are operating outside any formal system, invisible to banks, government support programmes, and development finance institutions, the Director General of the Small and Medium Enterprises Development Agency of Nigeria said this week.

Charles Odii, speaking at the Nigeria Business Summit 2026 session titled "The SME Economy: Advancing Trends and Opportunities," identified formalisation as the single biggest structural gap holding Nigerian small businesses back. "There are about 40 million MSMEs in Nigeria, but many are not captured in any system," he said. "If a business is not registered, it is invisible, and when you are invisible, you cannot access finance, incentives, or structured support."

Innocent Egwuonwu, Managing Director of Ojay's International, said operating conditions remain deeply challenging, particularly for manufacturers. "Access to finance and power are the two biggest constraints. Interest rates of over 30 per cent make it very difficult for SMEs to survive, and collateral requirements are often unrealistic for young businesses," he said.

Odii said SMEDAN is addressing the financing gap through cluster-based models that reduce individual collateral requirements and provide zero-interest or blended financing at scale. Christian Udechukwu, Anambra State Commissioner for Trade and Industry, said partnerships between state governments and development finance institutions are already enabling SMEs to access loans of up to ₦10 million without traditional collateral, using cooperative and guarantee-based structures.

Panellists converged on three interconnected levers they said must be addressed simultaneously: power, people, and finance. Egwuonwu was unequivocal: "If one thing must be fixed, it is power. Once power is stable and affordable, everything else becomes easier."