A new initiative called Money Talks has been launched by MSME Credit Direct to address poor cash flow management among small and medium-sized enterprises (SMEs) in Nigeria. The practitioner-led financial literacy program aims to equip entrepreneurs with essential skills to manage their finances effectively.
Expert Insights on Cash Flow
Speaking at the inaugural session, Olagoke Balogun, Chief Executive Officer of So Fresh, emphasized that inadequate cash flow is a primary cause of business failure, regardless of company size. He stated, “The number one reason businesses die, big and small, is lack of money. When cash finishes in a business, the business dies. There are only four ways money enters your business, but a thousand ways it flies out every single day. That is why cash flow is vital.”
Balogun, drawing from his experience building a successful Nigerian food brand, highlighted the difference between profitability and liquidity. He noted that many business owners mistakenly equate paper profits with available cash, leading to financial distress.
Importance of SMEs in Nigeria
According to the National Bureau of Statistics (NBS), SMEs account for approximately 96% of businesses in Nigeria and contribute nearly half of the country’s Gross Domestic Product (GDP). However, data from the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) reveals that many SMEs fail within their first five years, with poor financial management being a major contributing factor.
Bridging the Knowledge Gap
Credit Direct stated that the Money Talks series was conceived to bridge the financial knowledge gap among entrepreneurs and promote better financial decision-making. The company emphasized that financial inclusion should extend beyond access to loans, including equipping businesses with the knowledge to manage and deploy capital effectively.
The initiative is expected to provide practical guidance and tools to help SMEs navigate cash flow challenges, ultimately reducing failure rates and supporting economic growth.
