The National Institute of Credit Administration (NICA) emphasizes the importance of providing Small and Medium-scale Enterprises (SMEs) with loans featuring low-interest rates and flexible repayment terms to enhance their profitability. According to Prof. Chris Onalo, CEO of NICA, offering business-friendly loans will incentivize both prospective and existing entrepreneurs to borrow for business ventures and expansion.
High-interest rate loans pose challenges for SMEs, particularly due to their high operating costs, making repayment difficult. To create a conducive business environment and empower SMEs to thrive, access to single-digit interest-rate loans with flexible repayment options is essential.
Onalo highlights the significance of supporting businesses, considering their role in providing livelihoods to a significant portion of the population. Citing data from the National Bureau of Statistics, he notes that a majority of Nigerians are self-employed, underlining the importance of fostering an environment conducive to SME growth.
Access to affordable loans, common in advanced economies, enables businesses to compete effectively and expand both domestically and internationally. Lower interest rates allow SMEs to save more, reduce debt repayment burdens, and increase capital for expansion.
While acknowledging potential reluctance from lending institutions to offer long-term loans, Onalo advocates for flexible loan solutions tailored to reduce repayment strain on business owners. With flexible repayment terms, entrepreneurs can avoid resorting to loan sharks and select loan durations that align with their financial plans and goals.
NICA emphasizes the importance of providing SMEs with the financial resources and support necessary for growth and sustainability in the Nigerian business landscape.
