A Nigerian entrepreneur based in the United Kingdom, Francis Agbeja
The Director of Daffresh Freight Services gave the advice during a phone interview on Monday.
According to him, such partnership is crucial for any SME to acquire or absorb innovative technologies to perform maximally.
For him, the SME sector of any country is expected to drive the economic growth by offering significant opportunity for investors to contribute in the future of a country.
His words: “SMEs are an integral part of any economy and play a vital role in supporting a stable economic environment.
“They are crucial in upholding the growth and existence of the economy, especially developing countries in Africa.
“SMEs are driven by combined efforts of private entrepreneurs, government and financial institutions.”
One of the key elements for SMEs’ success is access to finance, he added.
He observed that SMEs find it difficult to get financial resources for building their businesses in many developing countries.
The director added that SME’s expansion to global markets or association with other firms was also related to the availability of finance.
“Usually, SMEs find it difficult to avail credit or equity. Even maturities of commercial bank loans offered to them are limited to a very short period.
“In the same way, lower interest rates are extended to a very few companies.
“SMEs are often considered to be high-risk borrowers because of insufficient assets and their vulnerability to market fluctuations,” he said.
He said banks turned out to be the biggest supporters of SMEs, however, added that banks would also benefit commercially from lending to SMEs.
Agbeja said SMEs could merge with other firms to complete their fund requirements.
According to him, mergers also provide SMEs opportunity to enter into international markets and form strategic alliances to expand their business and enter new productions.