JUST IN: NICA Asks For Business-Friendly Loans For Small Businesses in Nigeria

NICA Asks For Business-Friendly Loans For Small Businesses in Nigeria

The National Institute of Credit Administration (NICA) has asked lending institutions to provide - loans to SMEsThe institute said the availability of flexible loans will allow small business owners to choose from a pool of loan durations to grow their businessesNICA noted the lack of flexible loans discourages new and existing business owners from taking the plunge to grow their businesses

Henzodaily.ng's Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The National Institute of Credit Administration (NICA) has stated that the availability of loans with low-interest rates and easy repayment conditions will enhance the profitability of small and medium enterprises (SMEs) in Nigeria.

According to a statement signed by NICA's chief executive officer, Chris Onalo, the institute said a business-friendly loan will encourage new and existing business owners to borrow to start new businesses and grow existing ones.

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NICA advocates flexible loans for SMEsNICA boss, Professor Chris Onalo asks lenders to be flexible in loans to SMEs
Credit: NICA
Source: Original

NICA asks lenders to consider -digit loans

The institute said businesses in big economies are well positioned to compete better in their and even in other climes, where they might expand because of access to low- loans, usually single digits.

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NICA said:

“It is difficult for businesses to break even with high-interest rate loans because the SMEs have other high operating costs, making repayment challenging. To be better competitors and be empowered to expand their trades, businesses should have access to single-digit interest-rate loans with flexible repayment options. This is the ideal situation that will boost a business-friendly environment.”

It advocated support that will boost businesses in Nigeria as they provide many of the population a livelihood.

Reports say NICA said access to cheap loans will provide more finance to SMEs, reduce their repayment burden, and increase capital for expansion as they pay less over the loan.

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Flexible loan repayment encourages businesses

NICA observed that lending institutions may sometimes not want to offer long-term loans. Still, it called for flexible loan solutions to help reduce repayment hassles for business owners.

It is said that with access to flexible repayment conditions, entrepreneurs will avoid loan sharks and choose from several loan durations that suit their repayment plans, budgets, and financial goals.

The institute disclosed that cheap loans with flexible repayment terms allow small businesses to choose from loan durations and plan for financial stability.

It added that it advocates good credit access to help reduce the cost of debt and default rates among small and medium enterprises (SMEs).

The institute said that increasing the success rate of SMEs in the country will help boost the country's Gross Domestic Product(GDP).

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Henzodaily.ng reported that with an N50 billion loan, Access Bank hopes to empower 700,000 MSMEs nationwide through its ‘YouThrive' campaign.

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Deputy managing director of Access Bank, Victor Etuokwu, disclosed this at a recent news conference at the bank's headquarters.

Etuokwu said MSMEs that would benefit from the initiative would receive training to make the best use of the loan, according to a BusinessDay report

Source: Henzodaily.ng

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