Micro, Small and Medium Enterprises (MSMEs), have been generally acknowledged as the backbone to the success of developed nations, where they have gained much popularity.
From reducing unemployment to contributing to government’s revenue, the benefits of a well-developed MSME sector can never be over-emphasized. Thus, nations have set out plans to develop the MSMEs sector to achieve economic growth.
In high-income countries, MSMEs contribute well over 65 per cent of employment and roughly 48 per cent to the gross domestic product (GDP), while in low-income countries; they contribute about 30 per cent of employment and up to 15 per cent of GDP
There also exists a relationship between the informal sector, MSMEs and economic development. In low-income countries, the contribution from the informal sector is rather high, unlike in the high-income countries where the contribution is low.
This gives room for further development, to reduce the gap between the formal and informal sectors, and allow the poor to actively participate in the economy.
MSMEs are viewed as the engine of growth that contributes enormously to a nation’s GDP, employment generation, industrial output, poverty alleviation, export promotion, and self-independence.
In Nigeria, despite its importance as a tool for economic development and provision of employment, a variety of challenges impede MSMEs from playing the vital role of stimulating economic development.
Against this backdrop, the new Chairman of Ecobank TransNational Incorporated, Alain Nkontchou, at the weekend, revealed that in his tenure, the bank would focus more on MSMES financing, especially in Nigeria, where it has the biggest market and opportunity.
Speaking at a virtual conference, Nkontechou said the lender would also work closely with the African Union to provide financial support to MSMEs.
According to him, the increased support will help grow companies in the SMEs space, boost their bottom-line, and avoid erosion of revenue.
Aside from providing funding to SMEs, the new chairman said the management would intensify efforts to resolve its loan legacy issues.
He assured that Ecobank’s management is united in its firm resolve to work urgently, and diligently, to boost ETI’s financial position and restore Nigerian businesses to a more profitable state.
The Group Managing Director of Ecobank Group, Ade Ayeyemi, said: ‘’we will continue to resolve the loan legacy issue and bring Nigeria into the level that is capable. We will prioritise Nigeria; it is at the forefront of what we are doing.
“Nigeria is our biggest market in terms of performance, and creates a big opportunity for us. We will continue to work remotely, increasing our productivity and leveraging our strength in technology.”
He said the bank has adopted some cost-cutting mechanisms to stay ahead of trends, and ensure optimal performance amid the COVID-19 pandemic.
”We ensure that we avoid costs that we can avoid; again, we work closely with our suppliers and some of them have reduced the costs they were charging us.”