SMEs Need Infrastructure Beyond Financing – Senior VP, FCMB

The Senior Vice President of First City Monument Bank (FCMB) has emphasized that small and medium-sized enterprises (SMEs) require more than just access to financing to thrive, stressing that adequate infrastructure, supportive ecosystems, and capacity-building initiatives are equally critical to their long-term success.

Speaking on the challenges facing SMEs in Nigeria, the executive noted that while financing remains an important component of business growth, structural gaps in infrastructure continue to limit the ability of many small businesses to scale sustainably. These challenges include unreliable electricity supply, inadequate transportation networks, limited access to modern technology, and insufficient business development support systems.

SMEs are widely recognized as the backbone of Nigeria’s economy, contributing significantly to employment generation, innovation, and gross domestic product. However, despite their importance, many SMEs struggle to survive beyond their early years due to a combination of financial constraints and infrastructural deficiencies.

The FCMB executive explained that providing loans alone is not enough to guarantee business success if entrepreneurs are operating in environments where basic infrastructure is lacking. According to the bank, SMEs often face high operating costs, low productivity, and limited market access due to these systemic challenges.

One of the most pressing issues highlighted is the country’s unreliable power supply. Many SMEs rely heavily on alternative energy sources such as petrol and diesel generators, which significantly increase production costs and reduce profit margins. In some cases, energy expenses account for a substantial portion of overall business expenditure, making it difficult for enterprises to remain competitive.

Transportation and logistics infrastructure also remain major concerns. Poor road networks and high transportation costs can disrupt supply chains, increase delivery times, and raise the cost of doing business. These challenges are particularly acute for SMEs operating in manufacturing, agriculture, and retail sectors, where efficient movement of goods is essential.

In addition to physical infrastructure, digital infrastructure was also identified as a key enabler of SME growth. Access to reliable internet connectivity, digital payment systems, and e-commerce platforms is increasingly important in today’s business environment. SMEs that lack access to digital tools often struggle to compete with more technologically advanced firms.

The FCMB executive stressed that addressing these challenges requires a multi-stakeholder approach involving government, financial institutions, development agencies, and the private sector. While banks can provide funding and financial services, broader systemic improvements are necessary to create an enabling environment for SMEs to thrive.

Financial institutions, including FCMB, have increasingly expanded their role beyond traditional lending to include advisory services, capacity-building programmes, and entrepreneurship support initiatives. These efforts are designed to equip SMEs with the skills and knowledge required to manage their businesses effectively and navigate complex market conditions.

Industry analysts note that access to finance and infrastructure development are deeply interconnected. Even when funding is available, the absence of reliable infrastructure can limit the productive use of capital, reducing the overall impact of financial support programmes.

Experts argue that sustainable SME development requires a holistic approach that combines financing with improvements in power supply, transportation systems, digital connectivity, and regulatory frameworks. Without these complementary factors, many SMEs may continue to face significant growth barriers.

The FCMB statement aligns with broader discussions within Nigeria’s economic policy space regarding the need to strengthen the business environment for small enterprises. Policymakers have repeatedly emphasized the importance of SMEs in driving inclusive growth and reducing unemployment, particularly among young people.

Government initiatives aimed at improving infrastructure and supporting entrepreneurship have been introduced in recent years, but implementation challenges and funding constraints have limited their overall impact. As a result, private sector involvement has become increasingly important in bridging existing gaps.

The banking sector has played a key role in supporting SMEs through targeted lending programmes, digital banking solutions, and financial literacy initiatives. However, industry stakeholders acknowledge that financing alone cannot resolve structural challenges that hinder business growth.

The FCMB executive highlighted the importance of collaboration between financial institutions and policymakers in designing solutions that address both financial and non-financial barriers facing SMEs. This includes investment in infrastructure projects, regulatory reforms, and targeted support programmes for small businesses.

Digital transformation was also identified as a key driver of SME competitiveness. The adoption of technology-enabled solutions such as mobile banking, online marketplaces, and cloud-based business tools can help SMEs expand their reach, improve efficiency, and reduce operational costs.

However, the effectiveness of digital solutions depends heavily on the availability of supporting infrastructure, including stable electricity and reliable internet connectivity. Without these foundational elements, many SMEs are unable to fully benefit from digital innovation.

The FCMB executive reiterated the bank’s commitment to supporting SMEs through a combination of financial services and capacity-building initiatives. The institution continues to explore innovative ways to empower small businesses and enhance their resilience in a challenging economic environment.

As Nigeria continues to seek pathways to economic diversification and sustainable growth, SMEs are expected to play a central role in driving development. Strengthening the ecosystem that supports these enterprises is therefore seen as essential to achieving broader national economic objectives.

Ultimately, the message from FCMB underscores a critical reality: while financing is necessary, it is not sufficient on its own. For SMEs to thrive, they require a supportive infrastructure environment that enables them to operate efficiently, scale effectively, and contribute meaningfully to economic growth and job creation.