The Managing Director of Fidelity Bank Plc, Mr. Nnamdi Okonkwo has advised young entrepreneurs to adhere to corporate governance principles, proper book-keeping among other best practices for their businesses to survive.
The Fidelity Bank boss made this remark at the 2017 Africa's Young Entrepreneurs conference titled: "Networking with the Giants," held in Lagos, recently.
According to him, most of the companies that employ thousands of persons in the country today started as SMEs. "The second issue is how many of such SMEs die prematurely and why do they die prematurely? They die prematurely because of infrastructural constraints, lack of access to markets and a couple of other things. "That is why at Fidelity Bank, about seven years ago, we decided to support SMEs in a different manner by setting up the Managed SMEs unit.
"We did that because the fundamentals of why businesses fail is not just about financing alone. You must know what to do with the finance. You must know even simple booking-keeping practices," he explained. According to Okonkwo, supporting SMEs would help the federal government in its quest to diversify the economy.
He put the total number of SMEs in the country presently at 37,000 million, saying they employ between 60-80 per cent of the workforce in the country.
"We are glad to note that given the recession that the country is just coming out from, a lot of people have gone into various types of SME businesses and we are happy to note that a lot of young Nigerians are now taking to self-employment," he added.
He urged young entrepreneurs to embrace proper business planning, so that to survive in any sector they chose to operate in. "Another issue is poor corporate governance. Have you asked yourself about all those big names we knew when we were growing up, where are they today?
"So, the question is why do family businesses fail? Poor corporate governance, no succession planning and that is why such businesses don't grow beyond the operators. "You need to bring equity investors and step aside to let that business thrive. Beyond this, the access to suitable finance is also important for SMEs," he said.