A new World Bank/IFC report shows that Nigerian SMEs could more than double their growth with equity financing, but limited access to capital, poor governance structures, and major knowledge gaps continue to block their participation in the country’s capital markets.
A new analysis by the IFC reveals that Nigerian SMEs could grow at rates above 13 percent—more than double current levels—if they had access to equity financing, but structural barriers continue to hold them back.
Despite having over 40 million enterprises and a financing gap of 30 percent of GDP, Nigeria’s capital markets remain out of reach for most small firms, with the NGX Growth Board listing only seven companies since 2020. Experts cite macroeconomic instability, restrictive investment mandates, high collateral demands, and a major “knowledge gap” as key obstacles, with the SEC’s Agama Emomotimi warning, “It’s not about giving them money. When you give them money, they don’t know what to do with it.” IFC officials stress that better governance and new instruments like supply-chain financing are needed, while the LCCI notes a “trust deficit” and resistance to ownership dilution among SMEs.