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Straight talk, Over 70 million people — half the nation’s population — live on less than N100 per day, unable to meet their basic human needs. A subset, approximately 38million people, or 10.9 million families, live in “absolute poverty”. Malnutrition, lack of health care, substandard housing and illiteracy breed desperation, disease and daily suffering. Poverty traps future generations in a vicious cycle without hope or opportunity. In an increasingly globalize world, no one is immune to these problems.

Most of the world’s poor are self-employed. Each day, without the security of formal jobs, they eke out livings, whether it is by raising chickens, selling farm produce in markets or weaving baskets. Despite working from dawn to dusk, there is no money left over to improve their quality of life or expand their businesses. All they earn goes toward basic survival.

The Adopt a Business Project Endorsement arises from a Emerging Nigerian Dream Meeting convened in Lagos Nigeria in February 2008. The  aim to increase the capital available to high-growth SMEs by tackling some of the root causes that limit their growth prospects

Convened by the Innerveil Business Institute and the MicroFinance banks, the meeting gathered participants with many points of view from various parts of the country. The group found out that the lower-income segments of Nigeria benefit when SMEs have better access to finances because they alleviate poverty by creating more jobs and better wages.

The first concrete outcome of this meeting is the Adopt a Small Business Project Endorsement. It is at once an endorsement of principle, an endorsement of strategy and an endorsement of commitment. It meant to spark hope, to inspire action and to help the small and medium sized enterprises grow.

The provision of “micro” loans and financial services to the entrepreneurial poor to start income-generating small businesses is one of the most significant anti-poverty tools at work in the world today. Yet only 50% of the Nigeria’s poorest households have access to financial services and the growth of microfinance institutions has outpaced traditional funding sources. Focusing on income-producing solutions for the working poor is a powerful way to alleviate the pain of poverty for an entire family.

In the developing world, small- and medium-sized enterprises (SMEs) are critical for inclusive economic growth. These vibrant businesses broaden opportunity, increase productivity, create jobs, and help alleviate poverty. In developed countries, SMEs represent more than half of GDP and account for nearly 2/3 of employment. But they are largely absent from the formal economy of Nigeria, which are often able to sustain micro-enterprises and huge conglomerates but are missing mid-sized firms. Funding SMEs - and demonstrating their profitability - could help these businesses become a powerful engine of growth in Nigeria.

Today, there are trillions of investment dollars chasing returns around the globe. For SMEs in the developing world, however, although they are a potentially high-impact and high-return investment, only a trickle of capital reaches them. Large businesses have access to formal, bank-based credit and (in some markets) private equity and public markets. At the other end of the spectrum, over the last 30 years the microfinance movement has made substantial strides in making capital available to households and micro-entrepreneurs. SMEs, on the other hand, remain underserved and lack access to the tools and finance necessary for rapid expansion: they are the “missing middle.”

While there are indications that SMEs could generate high returns on invested capital, today these investments are expensive to find, execute, and manage relative to their size – and the investment returns often do not match the expense. Because the costs of sourcing and completing deals are high, it is often difficult to gather and verify important information, and investments can also be difficult to exit. SMEfunds through ‘Adopt a Small business project’ aims to increase the capital available to high-growth SMEs by tackling some of the root causes that limit their growth prospects.

Microfinance is a living idea. As the awareness grows, this idea will continue to evolve. There will be other visions initiatives and Endorsements beyond Nigeria. This is exactly the point. The Nigeria signatories have committed to developing further strategies, especially around
micro-entrepreneurs and teaching practices.

The Endorsement has already been signed by hundreds of traders, sole-proprietors, Banks, investors, business owners, business academics, retailers, Televisions, unions, professional societies, policymakers, governments, NGO & foundations and other stakeholders of SME development initiatives across the country. We encourage you to Join Us Now!.

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(C) ADOPTASME PROJECT: 2007