Of every two businesses in Nigeria, one is family-owned, a study by Moniepoint has stated.
The report, released on Wednesday, noted that a lack of governance structure and succession planning were some of the challenges facing family businesses in the country.
According to the fintech firm, the future of family-owned businesses remained bright due to the resilience of their operators.
A statement from the firm on the report said, “More than half of Nigerian family businesses don’t have strong digital capabilities with very few seeing it as a priority area. The lack of clear governance and business management structures, as well as poor succession planning, are some of the challenges that undermine the scalability of family businesses in Nigeria.
“Key drivers that undergird a lot of these enterprises include strong cash flow with a view to ensuring that they remain profitable, high levels of trust driven by shared vision and business objectives and cohesive cultural bonds where one out of every two Nigerian businesses bear the distinction of being a family business.
“Furthermore, the study avers that the story of Nigerian family businesses is one of resilience, adaptation, and enduring legacy. It posits further that the future of Nigerian family businesses is bright with potential even as more enterprises embrace the tools and strategies for success in a digital age, supported by innovative driven solution partners.”
It stated that as family businesses evolve, they would continue to be at the heart of Nigeria’s economic and cultural identity, powering the nation’s economy and shaping its future for future generations while ushering in a new era of growth, sustainability, and global competitiveness. Related News Climate change affecting 80% of businesses – Report Businesses urged to host data locally NLC protest paralyses business activities in Osogbo
Recently, the Special Adviser to the President on Presidential Enabling Business Environment Council and Investment, Dr Jumoke Oduwole, disclosed that there were approximately 23.8 million family businesses in the country, responsible for millions of jobs and collectively contributing around $200bn annually to the nation’s economy.
According to the Organisation for Economic Co-operation and Development, SMEs provide 60 to 70 per cent of jobs in most OECD member countries.
In Nigeria, SMEs contribute 48 per cent to the GDP and 84 per cent of jobs, according to the National Bureau of Statistics.
Speaking to the rationale behind this latest study, the Vice President of Communications and Public Relations, Moniepoint Inc, Edidiong Uwemakpan, noted that the decision to focus on family businesses was driven by their significant contributions to Nigeria’s economy despite their varying sizes and sectors.
“At Moniepoint, we pride ourselves on being more than just a financial services provider; we are an astute partner to business owners, helping them to be financially happy while ensuring that our innovative solutions power the dreams of these enterprises. We believe that the growth of family businesses directly supports the entire economy, which in turn essentially extends our ability to positively impact everyone else which aligns with our brand’s mission,” she said.
Stating Moniepoint’s commitment to helping those businesses embrace digitisation, he declared, “Our services have helped several family-owned businesses improve their operations through simplified payment collection, cash flow management, and access to capital.
“Our recent partnership with the CAC will further catalyse technology adoption for these businesses while providing a foundation for them to adopt better record-keeping, financial reporting and governance practices which are pivotal for their efficiency, productivity and long-term viability, and also drive market access and trade facilitation into regional and global value chains for them.”