SMEDAN to move 40 million informal businesses to formal sector, registers MSMEs

The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has started registering Micro, small and medium businesses (MSMEs) across the country. The process is to move them from informal businesses to formal sector.

In its first phase, the registration process, which reportedly targets the integration of over 40 million micro, small and medium businesses in the country, is expected to aid registered MSMEs to access finance, market, workspace, business, insurance, technology amongst others. The registration is also expected to promote capacity building and post-intervention support for micro-businesses.

The Chairman of SMEDAN, Femi Pedro, noted that the reason behind this move by the agency was to move informal businesses to the formal sector. He added that the move would also aid industrialization of the country, develop rural economy, reduce youth restiveness and unemployment as well as create the platform for sustainable economic growth and development in the country.

Meanwhile, MSMEs have been established to be the key to the development of any nation’s economy and also the hub for drivers of employment, industry, innovation and export diversification in both developing and developed economies. In Nigeria over 37.1 million micro and SMEs in the country contribute about 47.8% to GDP and account for 7.2% of overall exports, according to SMEDAN.

In a country where there are major infrastructural problems, the major challenge for MSMEs is the lack and cost of electricity that makes products uncompetitive in the market. While other emerging economies such as India, South Korea, and Brazil SMEs sector today has access to international markets as its major target, Nigeria’s is still grappling with access to electricity, said SMEDAN’s boss.

[READ MORE: SMEDAN invests N103.5 million in Sokoto entrepreneurs)

SMEDAN’s registration scheme is expected to create millions of jobs across the entire country, The Nation reported.