In Nigeria, Only 4% of MSMEs Have Access To Credit Facility

Only 4% of MSMEs Have Access To Credit Facility

The Association of Credit Bureaus of Nigeria (CBAN) stated that despite the efforts of the Central Bank of Nigeria (CBN), credit agencies and financial institutions to provide loans to micro and small enterprises (MSMEs), only about 4% of the 40 million small and medium enterprises and micro companies in the country have access to credit.

President and Executive Director of the Nigeria Credit Bureau Association, Tunde Popoola (PhD.) said that, the CBAN is looking for ways to deepen MSMEs’ access to credit by focusing on capacity building and raising awareness of small business creation. In a webinar entitled “MSME and Access to Credit” organized by the CBAN, he stated that easy access to credit is essential for MSMEs to fulfill their role as a tool for economic growth.

He stated that some of the problems that hinder the development of small, medium and micro companies are the lack of adequate accounting, insufficient capacity to propose good business plans, insufficient business presence and the challenge of providing guarantees for obtaining credit.

He said, ”We have a lot to do to defend the credit problem and we are vigorously developing the capacities of our stakeholders. For CBAN, we are proud of our ability to develop advocacy resources that we believe will lead all businesses and individuals to obtain credit in Nigeria.” He suggested that small, medium and micro businesses digitize their financial records, saying the government, financial technology companies and commercial banks have a variety of financing opportunities and intervention funds.

Dr Taiwo Popoola, managing partner of Taisha Associates, said that small, medium and micro companies are the basis of the economy, but he said that accounting is a challenge that affects his operations in the country. According to him, accounting allows small businesses to obtain loans to expand their businesses. He said that a well-preserved book allows creditors or investors to clearly understand the financial situation of the business and make financial projections and investments.

He highlighted that the lack of good records is one of the reasons why small, medium and micro companies are struggling to expand their businesses while maintaining their livelihoods.

Jameela Sharrief-Ayedun, managing director of the credit registry, emphasized that companies need to implement the use of technology to deepen access to credit and expand access to credit. She suggested that small, medium and micro companies understand the 3Cs so that they can easily obtain credit from financial institutions.

3Cs includes capacity, character and capital. Good financial accounting shows that you have the ability to repay loans and that you have a fixed income. Personalized loan repayment is another feature that small, medium and micro-enterprises must have in order to obtain loans, as it shows they are willing to pay back. An accountant can help you show your character with a good credit score,” she suggested.

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