Study Shows 42% of Nigerian SMEs Can’t Survive a Month Without Income — Moniepoint

A new study conducted by Moniepoint Inc., one of Nigeria’s leading financial technology firms, has revealed that 42 percent of small and medium-sized enterprises (SMEs) in the country would be unable to sustain their operations for more than a month without regular income inflows. The report highlights the fragile financial health of many small businesses and underscores the urgent need for better financial planning, access to credit, and long-term support systems for the sector.

According to the findings, the majority of Nigerian SMEs operate with minimal cash reserves, making them highly vulnerable to economic shocks, fluctuating consumer demand, and disruptions such as inflation or currency devaluation. The study, which surveyed thousands of business owners across various sectors including retail, manufacturing, agriculture, and services, found that many entrepreneurs rely almost entirely on daily or weekly cash inflows to keep their businesses running.

Moniepoint explained that the survey was conducted to assess the resilience of Nigeria’s SME ecosystem amid challenging economic conditions. It revealed that while SMEs remain the backbone of the country’s economy—employing more than 80 percent of the workforce and contributing nearly half of the GDP—many still struggle with weak financial structures, limited access to credit, and a lack of formal business management practices.

Commenting on the findings, Moniepoint’s Chief Executive Officer, Tosin Eniolorunda, emphasized that the results reflect both the resilience and vulnerability of Nigerian entrepreneurs. “Small businesses are the lifeblood of Nigeria’s economy, but many are running on razor-thin margins,” he said. “The fact that nearly half of SMEs can’t survive for a month without income shows how urgently we must build a more inclusive financial system that supports their growth.”

Eniolorunda noted that one of the main challenges SMEs face is inadequate access to affordable financing. Despite government intervention programs, many small businesses continue to find it difficult to secure loans from traditional banks due to stringent collateral requirements, high-interest rates, and lengthy approval processes. As a result, many entrepreneurs turn to informal lenders or rely solely on daily sales to stay afloat.

He explained that Moniepoint’s mission is to bridge this gap by providing digital financial solutions that empower business owners with tools for payments, savings, and credit access. Through its digital banking platform, Moniepoint enables SMEs to manage transactions efficiently, build financial histories, and gain access to working capital loans.

The study also found that only about 28 percent of SMEs surveyed have access to formal business credit, while the remaining depend on personal savings or family contributions. This limited access to finance, coupled with inflationary pressures and unstable exchange rates, has placed immense strain on business operations, leading to frequent closures and layoffs.

Furthermore, the report highlighted that about 60 percent of SMEs cited high operating costs, including energy expenses, logistics, and raw material prices, as major constraints. The unstable power supply, in particular, has forced many small businesses to depend on costly diesel and petrol generators, significantly reducing profit margins.

Another key finding from the report is the low level of digital adoption among SMEs. Although more business owners are embracing mobile banking and e-payment platforms, a substantial number still operate primarily in cash, limiting transparency and financial inclusion. Moniepoint recommended that increased digitalization of business operations would help improve record-keeping, enhance access to finance, and strengthen business continuity during economic downturns.

Eniolorunda further stressed that Moniepoint is committed to helping SMEs thrive by offering financial literacy programs, business advisory services, and digital infrastructure that promotes transparency and accountability. He added that empowering entrepreneurs with knowledge and digital tools is vital to achieving sustainable economic growth.

Economic experts who reviewed the report have described it as a wake-up call for policymakers to intensify support for Nigeria’s small business sector. They noted that the government must create an enabling environment that prioritizes financial access, tax incentives, and infrastructure development to reduce the operational burden on small enterprises.

A financial analyst, Dr. Kemi Ajayi, remarked that the findings align with current realities in Nigeria’s business environment. “Most small businesses are barely surviving due to rising inflation, naira volatility, and weak consumer purchasing power,” she said. “If policymakers and financial institutions don’t address these systemic issues, we risk seeing more SME closures in the near future.”

The study concluded with a call for collaborative action among financial institutions, government agencies, and private sector players to support SME sustainability. Moniepoint reaffirmed its dedication to expanding digital financial inclusion and promoting innovative solutions that will help entrepreneurs build stronger, more resilient businesses.

Eniolorunda also announced plans for new partnerships with microfinance banks and business development organizations to enhance credit availability for small businesses, particularly those in underserved communities. He emphasized that empowering small business owners with financial access and stability is essential to reducing poverty and driving national development.

 

As Nigeria continues to navigate a complex economic landscape marked by inflation, exchange rate fluctuations, and global uncertainties, the Moniepoint report highlights an urgent need for sustainable financial systems that can help SMEs withstand future shocks. Strengthening this critical sector remains central to achieving inclusive growth, job creation, and long-term economic resilience in Africa’s largest economy.