
The centre for strategic Enterprises Development (CSED) has called for the importance of empowering MSMEs.
The organization buttressed on this at a business launch with selected nano, micro, small and medium enterprises (MSMEs) at their headquarters in Abuja, Nigeria.The event fell on the same day with the United Nations MSME day on June 27 and connected virtually with CSED’s Co-founder and Head of Global Agenda in the United Kingdom.
The event was most focused on the recent Monetary Policy Rate (MPR) of the Central Bank of Nigeria (CBN), in which the Acme bank hiked Nigeria’s interest rate to curb inflation.
MSMEs expressed a consensus concern, staying that the new policy is hindering business activity.Micro and small businesses are allegedly shutting down due to the rising price of goods disintegrating the capital and profits making restocking nearly impossible.
CSED Co-founder/CEO , Izu Divine Freeman, admit that the interest rate is a benchmark for fighting inflation but he doubts it effectiveness in the current Nigerian situation.
He said:
“In established economies with credit systems, higher interest rates discourage excessive spending. However, Nigeria is a cash-based economy. Debit cards, the most common type, function like cash. So, the interest rate hike won’t affect consumers directly, but rather businesses reliant on credit for production or restocking.”
He further said that businesses with access to credit loan can raise prices to offset the high cost of credit, further squeezing consumer purchasing power.Businesses without access may be forced to shut down.
Ikechukwu Okoli, CSED Co-founder and head of Global Agenda expressed that reducing interest rates would allow businesses to access funds for production and increase product availability to alleviate inflation.
He also enunciate that improving security would encourage farmers to return to the farms to boost food production. He also highlighted that reliable electricity is very important for manufacturing and also for economic activity.
Freeman said that findings show that many MSMEs need help accessing government interventions due to complex application processes.
He said this is why CSED created Capsule, an innovation refining MSME operations. Capsule offers various functionalities, including MSME digitization, automated credit score generation, standard financial statement creation, Permission-based sharing of processed reports with funding marketplace.