PwC MSME Survey 2020

S What is the most pressing problem currently facing your business? Obtaining finance Finding customers Infrastructure deficit (e.g. electricity, transport deficiencies) Insufficient cash-flows Multiple taxation 7% Competition 7% Unskilled workforce 7% Advancements in technology and technology Source: PwC analysis PwC MSME Survey 2020 PwC 5% disruptions Regulatory challenges (e.g. red 4% tape/bureaucracy) Corruption 2% Slow judiciary/court processes 1% 16% 15% 14% 22% Obtaining finance is the most pressing problem MSMEs face. Access to finance, in particular credit, is a critical enabler for the growth and development of small and medium enterprises. The SME credit market, however is notoriously characterized by market failures and imperfections. Hence, in emerging markets and developing economies, 55% to 68% of formal SMEs are either unserved or underserved by financial institutions, leading to a total credit gap estimated to be USD5.1 Trillion. PwC estimates the financing gap for Nigerian MSMEs to be about N617.3 billion annually (pre-COVID-19 pandemic). Based on analysis of data from the CBN annual statistical bulletin, small businesses accounted for less than 1% of total commercial banking credit in 2018. According to the National Bureau of Statistics (NBS), less than 5% of SMEs have been able to access adequate finance for working capital and for funding business growth/expansion. Yet, SMEs still contribute a staggering c.50% to GDP. June 2020 15

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