By Godwin Oritse
Amid the tough economic climate in Nigeria and high energy costs plaguing Small and Medium-sized Enterprises (SMEs), a recent study has recommended green financing initiatives through active support from financial institutions like; Bank of Industry (BOI), African Development Bank (AfDB) and the Nigerian Export-Import Bank (NEXIM).
Nigerian researcher, Mr. Oghenevwire Okugbere FCA, revealed this in his recently-concluded research titled: “Access to Sustainable Finance in Stimulating SME Growth and Economic Resilience in the United States for Overall Economic Growth and Development,” published in February 2025.
Although Okugbere’s latest research focuses on the US economy, it provided insight into the role of access to sustainable finance for SMEs and compared the practice in US to Nigeria and Canada.
“Nigeria, as a developing country, faces a very different set of challenges in the realm of sustainable finance for SMEs. Despite its rich natural resources, Nigeria’s SMEs often struggle with high energy costs, limited access to affordable finance, and a practical tailor-made support for green technologies
“However, there are emerging opportunities.
In 2020, Nigeria issued its first Green Bond, signaling an increasing awareness of the role sustainable finance can play in fostering economic development. Nigerian SMEs, particularly in agriculture and renewable energy, are starting to receive support through green financing initiatives from organizations such as the BOI, AfDB and the NEXIM Bank. These initiatives aim to support SMEs transitioning to sustainable practices, such as using solar energy for rural agriculture or improving waste management systems,” he told Vanguard.
Nevertheless, he remarked that compared to Canada, the G7 countries, and even other African nations like South Africa; Nigeria still faces significant barriers to the widespread adoption of sustainable finance, including limited financial literacy and access to green capital.
Okugbere noted that SMEs represent about 90% of businesses and more than 50% of employment worldwide and SMEs contribute up to 40% of national income (GDP) in emerging economies.
His words: “Every successful US regime in the last few years has made small and medium-sized enterprises (SMEs) an integral focus of their economic agenda. SMEs to the U.S. economy, has contributed significantly to job creation, innovation, and economic development. These businesses represent approximately 99.9% of all firms in the U.S. and employ nearly half of the private sector workforce.
“Ensuring that SMEs have access to sustainable finance is crucial for their growth and resilience, especially in the face of an evolving economy that prioritizes sustainability and climate action. Sustainable finance offers an essential route for businesses to grow while addressing environmental, social, and governance (ESG) considerations.”
While describing sustainable finance as investments and financial products that support environmentally sustainable, socially responsible, and ethically governed enterprises, Okugbere stressed that as global economy shifts towards addressing climate change and inequality, SMEs are increasingly required to integrate sustainability into their operations and sustainable finance is vital to help SMEs navigate this shift and capitalize on emerging market opportunities.
He listed some other benefits of sustainable finance for SMEs to include; promoting green innovation, long term growth, resilience to economic shocks, and access to new markets.
Meanwhile, Okugbere posited that the major challenges to accessing sustainable finance globally are; inadequate finance infrastructure and support, lack of awareness and education, creditworthiness and risk.
The post How Nigerian SMEs can overcome high energy costs – Okugbere appeared first on Vanguard News.