Access remains major financing hurdle for Nigerian MSMEs – PwC

Access remains major financing hurdle for Nigerian MSMEs – PwC

A new survey by PriceWaterhouseCoopers (PwC) reveals that access to financing remains a significant hurdle for Micro, Small, and Medium Enterprises (MSMEs) in Nigeria.

According to the report, high-interest rates, complex loan procedures, and insufficient collateral make it difficult for MSMEs to secure the funds needed to sustain their operations.

The survey also shows that 67 per cent of Nigerian MSMEs have experienced significant decline in businesses over the last two years.

High costs and low consumer purchasing power are among the primary reasons cited by business owners.

According to the survey, access to financing remains a significant hurdle for MSMEs, with 27 per cent identifying high-interest rates as the primary barrier to obtaining loans, while another 26 per cent pointed to excessive procedures, and 16 per cent mentioned insufficient collateral.

The report attributes these financing challenges to the informal nature of many Nigerian MSMEs, particularly micro and small enterprises, which are often seen as costly and risky to serve.

Most of the MSMEs surveyed needed loans primarily for working capital, with 33 per cent requiring less than N500,000, 23 percent receiving between N500,000 and N2 million, and 21 per cent obtaining loans above N2 million.