NAME: ADEOSUN OYINKANSOLA WALIYAT

MATRIC NO: 180319521

DEPARTMENT: ART AND SOCIAL SCIENCES EDUCATION
COHORT: BUSINESS EDUCATION

The corona virus (covid-19) pandemic is a virus that has affected people in all aspects. From
business to insurance to banking, etc. and one of the sectors that have been affected the most is
the Small, Micro and Medium Enterprises (SMEs) in Nigeria. Statistically a study showed that
98percent of Nigerian SMEs have suffered critically in their businesses in one way or the other.
Originally SMEs already faced a lot of problems, which will also be evaluated, and those
problems were propounded by the pandemic. Using “Anike Tapes and Fittings" as an indigenous
case study, some of the problems SMEs faced as a result of the pandemic include:
1. Financial Unrest
The covid-19 pandemic has expected caused a lot of financial set-backs for the MSEs business
owners in many ways. Firstly, the initiation of a lockdown was the biggest blow that dealt with
the business owners. With respect to this initiative control by Government, restrictions on
physical transaction with customers led to a fall in Sales and Profit, especially entrepreneurs/
customer with knowledge gap on Online marketing. Some business owners who traded
perishable goods also had major losses because the goods deteriorated due to the lockdown
initiative control to mitigate the widespread of the virus.
Also, Covid-19 pandemic and subsequent lockdown caused an unparalleled health crisis with
often tragic consequences and disrupted every aspect of social and business activity across the
globe. In this vein, things became more expensive within the economy, Inflation took place but
customers were only willing to pay less.
2. Unfit Business Idea
A lot of SMEs business owners make the mistake of choosing the wrong businesses to start with
which end up being a challenge later on. This is a challenge that was propounded by the
pandemic because a lot of people were looking for a swift way in making a living as a result, a
lot of SMEs were set up. However, businesses that are unfit liquidated due to unsuitable business
idea.

3. Competition
Market Competition is a major impact of Covid-19 pandemic that affected SMEs. Businesses
that are unfit for competition are more likely to suffer loss or liquidate. The rate of competition
skyrocketed over the course of the pandemic. As a result of this, customers are willing to buy in
lesser price from a manufacturer/ retailer or even pay less for services rendered due to irregular
circulation of money in the economy.
4. Education and Experience
The battle against illiteracy is one that has been fought for a long time in Nigeria. Many of the
SMEs entrepreneurs are uneducated therefore they lack adequate knowledge in terms of work
morals and experience in the line of business they engaged. Business owner’s due to knowledge
gap and inexperience couldn’t withstand the pressure that aroused as a result of the pandemic
thereby leading to retrenchment of staff and inability to meet up with expectations to keep the
business moving.
5. Lack of Adequate Capital
A very popular challenge faced by Nigerian SMEs is the unavailability of an adequate means of
finance to use as capital when setting up their business. There is no business that can be set up
appropriately without enough capital. In a country like Nigeria, where entrepreneurs have limited
access to funds because most financial institutions give very strict and hectic conditions which
later affects their personal income. The pandemic made this challenge even worse because
financial institutions became more stringent because every aspect of the economy was affected
negatively and so funding for capital even became harder than it was before.
6. Technological Change
Many SMEs in Nigeria staled equipment and this has affected their competitiveness. This
technological fall back is mostly caused by businesses not having sufficient money to buy the
needed equipment. A negative impact on the cash flow of the economy and considering the fact
that SMEs business owners were restricted from operating, lack technological advancement
caused a huge set back to most businesses.
7. Poor Financial Control
Poor knowledge of application of funds is a common challenge among Nigeria SMEs. A number
of entrepreneurs’ lack business finances methodology, sometimes intermix business finance with
personal funds. This disrupts the flow of the business and later affects them. The pandemic made
most businesses not taking cognizant of the Business entity concept which says “Business is
separate from owners personal expenses and income.

8. Unfavorable Government Policies

The government is inconsistent with its policies and some of these policies affected SMEs
negatively. Example of such policies was initiation of a nationwide lockdown. Even though the
lockdown was quite necessary for the safety of the people, to curb fast spreading of the virus, the
Nigerian government’s failure to produce another means of income or sustainability (like the
stimulus checks that were given in the United states) in time, this has proven to a big challenge
to SMEs. Although the federal government created a relief plan, most SMEs entrepreneurs said it
was already too late as the pandemic has already ruined their businesses and some said they
couldn’t even benefit from the relief plan.
9. Inflation in Price of Goods & Services
The factories with available materials or resources for production surely waxed up the price of
the products whereby inflation is ensured. This situation was distressing and even became
insufferable to the organization because there’s insufficient fund to cater for the basic needs and
procurement of raw materials needed.
10. Decrease in Customer Patronization
As a result of the impact of Covid-19 on SMEs, they have been a drastic fall in the number of
customers/ consumers patronage resulting to a drop in the revenue margin curve of the
organization/ business. Hence, serving a trying time for SMEs business owners due to
restrictions or partial lockdown on all activities.
These are the major challenges faced by Nigerian SMEs because of the Corona Virus(covid-19)
pandemic.