IN NIGERIA, GOOD ECONOMY AROUND THE CORNER, SAYS NICA

Monday, 15th April 2024.

CreditEconomy News Interview

Prof. Chris Onalo, FICA, ICCF, B.Sc, M.A, Ph.D (credit management).

Registrar/Chief Executive Officer, NICA

IN NIGERIA, GOOD ECONOMY AROUND THE CORNER, SAYS NICA

Nigeria’s statutory body for the control, supervision, and regulation of credit management profession, the National Institute of Credit Administration (NICA), has said that individuals as well as businesses should brace up for a new economic dimension in the country.

“In a statement issued by the Chief Executive Officer of NICA, Prof. Chris Onalo, he said the economy will develop faster, as productivity will be increased in the country”.

The emergency of cottage industries, informal and below informal sectors, as well as small and medium enterprises as the main stream of the economic will combined to define Nigeria’s new economic order.

Onalo encouraged a new economic dimension that will promote credit availability to individuals and businesses, so as to increase capacity for productivity in the economy.

He said,

“In the new economic dimension, businesses should be driven strictly on credit. The new dispensation should promote buying and consumption that is strictly credit driven”.

With credit availability, there will be increase in production because the capacity to produce in large quantity will be boosted as the producers will have access credit to expand their operations through a well funded guarantee arrangement that will play the midwife role.

“The new dispensation would enable access to credit from banks as lending institutions will be willing to give out financial assets to producers of those goods and products for people to buy using credit.”

Onalo explained that a national credit guarantee system that is fully funded by the government will help to promote credit accessibility.

However, he added, when individuals and businesses have access to credit, it should be welcomed with integrity and access to requisite personal and corporate credit information.

The professor of credit management said,

“On the part of Nigerians, it is not going to be business as usual. Track record relating to integrity and honesty will be the driving force in determining credit worthiness”.

So, if you don’t have good conduct to keep your revenue and your source of income going, you will find yourself in stagnation.

“A bad track record hinder access to buying on credit and paying from your income that comes at the end of every month. But a good record track will help to stabilise workplace attitude in favour of productivity; it also stabilise family spending habit in terms of steady stream of income coming in, so that families can plan their expenditure on what they want to buy, at what price and at what time.”

 

SMES NEED BUSINESS-FRIENDLY LOANS, SAYS NICA

Nigeria’s statutory body for the control, supervision, and regulation of credit management profession, the National Institute of Credit Administration, has said availability of loans with low interest rates and flexible repayment terms will boost profitability of small and medium enterprises in the country, In a statement issued by the Chief Executive Officer of NICA, Prof. Chris Onalo, the Institute said a business-friendly loan will encourage intending and existing business owners to borrow to start new businesses, and expand existing ones.

According to the Institute, businesses in advanced countries are well positioned to compete better in their countries, and even in other countries were they expand to because of access to low interest rate loans which are usually lower single digits. The statement said,

“It is difficult for businesses to break even with high interest rate loans because the SMEs have other high operating costs which will make repayment a challenge to them.

To be better competitors and be empowered to expand their trades, businesses should have access to single digit interest rate loans with flexible repayment option. This is the ideal situation that will boost a business friendly environment.”

The Institute advocates support that will enable businesses to thrive better in the country because they provide livelihood to a large proportion of the population.

“According to NICA, access to cheap loans will provide more finance to SMEs, reduce their debt repayment burden, and increase capital for expansion as they will pay less over the life span of the loan”.

While observing that lending institutions may not want to offer long term loans in some cases, NICA advocates flexible loan solutions to help reduce repayment strain on the business owners’ finances.

With access to flexible repayment terms, NICA says, entrepreneurs will avoid patronizing loan sharks, and choose from a variety of loan durations that suits their repayment plans, budget and financial goals.

NICA says that cheap loans with flexible repayment terms allow small business borrowers to choose from a variety of loan durations, and plan for their financial stability.

“The Institute advocates good credit access as this will help to reduce the cost of debt and default rates among the SMEs”.

According to NICA, increase in the success rate of SMEs in the country will help to boost the country’s Gross Domestic Product.

 

 

 

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