MSMEs are known as the backbone of a nation’s economy. With more and more firms being owned and run by women, women have been taking on a bigger and bigger role in the MSME sector. Several nations have experienced this phenomenon’s rise over the past few years.

The average Total Entrepreneurial Activity (TEA) rate for women was 8.9%, as compared to 13.3% for males, according to the Global Entrepreneurship Monitor (GEM) 2020/2021 Women's Report. This demonstrates the active participation of women in developing and managing MSME firms.

Women in Africa have shown immense entrepreneurial spirit and are actively engaged in various sectors, including agriculture, retail, manufacturing, technology, and services. They often start businesses to address local needs and contribute to their communities' economic development.

The ownership structure and financial environment of Micro, Small, and Medium Enterprises (MSMEs) in Nigeria are clarified by new research undertaken by Small Firm Diaries and released by the National Bureau of Statistics (NBS).

Study Reveals Women Ownership in Nigerian MSMEs & Financial Challenges

The "Country Data Overview" study draws attention to the substantial presence of women-owned MSMEs in the nation. Additionally, it draws attention to the major difficulties these companies have in adopting digital financial services (DFS). Understanding the function of MSMEs, which have a large economic impact on Nigeria and employ the vast majority of the country's workers, is essential according to this study.

Gender Distribution in MSME Ownership

The survey demonstrates a significant trend in the ownership of MSMEs in Nigeria, with women owning 40% of these companies. In comparison, just 12% of MSMEs had male and female co-owners. According to the data, 48% of all MSMEs nationwide are owned by men, which is a little greater percentage than female ownership.

When contrasting female ownership of MSME in Nigeria with global statistics, a notable discrepancy is seen. According to a World Bank analysis, organisations with female ownership representation make up 32.9% of all businesses worldwide, but just 16.8% of businesses in Nigeria. This number decreases even more to just 12.2% for larger enterprises, highlighting the gender pay gap in the corporate world.

The goal of the study was to comprehend the function and conduct of MSMEs in Nigeria, which are essential to the expansion of the economy of that nation. MSMEs account for an amazing 96% of all businesses and 86% of all jobs in the country.

MSME Revenue and Financial Challenges

The study's findings indicate that MSMEs in Nigeria generate an average yearly revenue of N2.3 million, with an operating margin of N768,000. The survey does point out that 62% of MSMEs have a monthly income of N300,000 and that 47% have an even lower monthly revenue of N200,000.

A bank account was reported as being held by almost all MSMEs (97%) in the research, although fewer than half (50%) said they used it frequently. In addition, whereas 45% of MSMEs owned by women used credit facilities, 47% of MSMEs owned by men borrowed money to fund their enterprises. Men received loans at an average of N93,000, while women typically received loans of N57,000.

The adoption of digital financial services (DFS) by MSMEs in Nigeria was another area of emphasis in the report. A debit card was claimed by more than 80% of respondents, and 65% said they used mobile banking services. The use of credit cards, however, remained astonishingly low at just 5%.

60% of those who were asked about the difficulties they had utilising DFS identified delayed money arrival as their main problem. 30% of users experienced issues with access loss and lost money. In addition, 27% of MSME owners mentioned a lack of necessary skills as a major impediment to implementing technology, while over 50% cited cost.

Conclusion

The Small Firm Diaries research offers insightful information about Nigeria's MSME sector, particularly with regard to gender representation and financial difficulties. The significant number of women who own businesses shows their expanding influence on the economy of the country. But there are still a lot of obstacles to go through, particularly with regard to the acceptance of digital financial services. These results must be taken into consideration by policymakers and stakeholders in order to create focused initiatives that aid and empower MSMEs, promoting inclusive economic growth in Nigeria.