The Managing Director of Regent Microfinance Bank, Idris Olugbesan, has identified access to capital, trust within the financial ecosystem, and the strategic use of technology as the three critical factors that will determine the future trajectory of small and medium-sized enterprises in Nigeria. He made the remarks during a media interaction focused on the evolving landscape for small businesses and the role financial institutions must play in supporting sustainable growth.
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The funding gap that keeps holding businesses back
Despite contributing significantly to employment and economic output, many Nigerian SMEs continue to operate with limited access to the structured financing they need to scale. Olugbesan pointed out that a large proportion of small businesses either operate informally or lack adequate financial documentation, making it difficult to qualify for credit through traditional banking channels.
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The irony is stark: the businesses most in need of capital are often the least able to access it, precisely because the systems designed to deliver that capital were not built with them in mind.
He called on financial institutions to design more inclusive products that reflect the real operating conditions of small businesses, rather than applying frameworks built around large, formally structured enterprises. When financial products are designed around the actual needs of entrepreneurs, he argued, it becomes easier for businesses to grow and contribute meaningfully to the economy.
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Technology as a practical growth tool
Beyond financing, Olugbesan stressed that the adoption of technology is no longer optional for SMEs seeking to remain competitive. Many small businesses in Nigeria still manage operations manually, with limited use of digital tools for inventory, payments, accounting, or customer engagement. This not only limits efficiency but also makes it harder for businesses to build the financial records that lenders look for when assessing creditworthiness.
For Nigerian SMEs, technology is not just about keeping up with trends — it is about building the digital paper trail that eventually opens the door to formal financing.
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What financial institutions need to do differently
Olugbesan’s broader message was a challenge to the financial sector to take a more active role in bridging the gap between SMEs and the capital they need. Stronger collaboration between banks, microfinance institutions, and entrepreneurs is essential, he said, noting that the current level of engagement falls short of what the sector requires.
As Nigeria works to expand economic activity and reduce unemployment, the SME sector will remain central to those goals. Whether it can deliver on that potential will depend in large part on how quickly financial institutions respond to the access and trust gaps that continue to limit small business growth.
