Nigeria: Less Than 50% MSMEs Have Active Bank Accounts – Study

Less than 50 percent of micro, small and medium enterprises (MSMEs) in Nigeria operate their bank accounts regularly, a new study by Small Firm Diaries (SFD) has revealed.

SFD is a global multi-country research initiative that provides insight into the financial lives of small businesses, by collecting data across seven countries in Latin America, sub-Saharan Africa, Southeast Asia, and the Pacific.

The Nigeria Country Data Overview of the SFD report posted on the website of the National Bureau of Statistics (NBS) shows that although 97 percent of MSMEs in Nigeria had bank accounts during the period of data collection between August 2021 and August 2022, less than 50 percent of the MSMEs used the bank accounts regularly.

The study was conducted to understand the role and operations of MSMEs which make up 96% of businesses and 86% of total employment in the country.

According to the study, the average annual revenue for MSMEs in Nigeria is N2.3 million while the operating margin is N768,000. It further stated that 62% of MSMEs had a monthly revenue lower than N300,000, while 47% had monthly revenue lower than N200,000.

The study also showed that around 47% of MSMEs owned by men took loans to support their business while 45% of female-owned MSMEs used credit facilities.

On the adoption of digital financial services (DFS), over 80% of the MSMEs claim to own a debit card and 65% made use of mobile banking services and 56% claim to use PoS machines, but only 5% of MSME owners in the country said they had used a credit card.

When quizzed on the problems they encountered in using DFS, 60% said that the major problem encountered was money arriving late, around 30% complained that loss of access and missing money was their major problem.

About 63% of respondents in the study reported using DFS because someone was paying them through the medium.

In terms of the adoption of technology for their businesses, more than 50% of MSME owners claim that cost is the major barrier to the use of technology, while about 27% stated the skill required was the barrier.

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