Sovereign Finance Commits to Supporting SMEs Following Exchange Rate Unification

Sovereign Finance Company Limited, a leading financial services provider, has expressed its unwavering commitment to supporting Small and Medium-sized Enterprises (SMEs), especially in light of the volatility occasioned by the impact of the exchange rate unification in the country.

During a webinar titled "Unification of Exchange Rate: Impact on Nigerian Small & Medium Enterprises" held on Tuesday, Olusola Dada, Managing Director of Sovereign Finance Limited, emphasized that the exchange rate unification is a favourable policy with huge potential to transform the nation's economic landscape. However, its success will depend on the Government's ability to promptly address leakages, resolve security challenges, boost crude oil production, promote export-oriented industries, and deploy necessary tools to combat inflation.

According to Olusola, "The unification of exchange rates will undoubtedly increase Government's liquidity, as a result of definite rise in revenue accruable to all tiers of Government. This should enhance the ability of the Government to increase minimum wage and embark on critical capital expenditures necessary to catalyze the economy for higher productivity.

The finance expert further revealed that improved liquidity is expected to result in lower interest rates and the availability of more funds for business expansion. Sovereign Finance is positioned to assist SMEs in accessing necessary facilities for expansion in preparation for higher demand that would arise from increased disposable income. Recognizing that funding is crucial for business sustainability and profitability, he encouraged SMEs to build the necessary capacity to partake optimally from different intervention funds available from CBN and other developmental institutions of Government.

Olusola asserted that the company will be readily available to help SMEs navigate and capitalize on the opportunities arising from the exchange rate unification.

Dr. Olatunji Esan, Chief Commercial Officer at Sovereign Finance, explained in his presentation that the successful floating of the currency regime marks a major shift, with market forces now determining the exchange rate in Nigeria.

He argued that the inflationary impact of the exchange rate would eventually be curtailed by necessary monetary policy measures. He maintained that the impact should be minimal since most SMEs had already been sourcing their foreign currency from the open market before the policy came into effect.

He further remarked that the unification of exchange rates will eliminate market distortions, particularly arbitrage, establish a level playing field for all participants in the forex market, and instill confidence in investors.

Sovereign Finance Limited, a leading financial services provider, is committed to delivering innovative financial and investment solutions to customers across different sectors of the Nigerian economy. Their primary goal is to create opportunities for clients to accumulate capital and build sustainable wealth.