The National Institute of Credit Administration (NICA) has voiced concerns over the detrimental effects of restricted access to credit on the expansion of businesses, production capabilities, and the worsening of poverty levels across Nigeria.
In a recent statement, NICA underscores the essence of a well-functioning consumer credit system, which facilitates the acquisition of goods and services on credit, thereby diminishing the dependency on cash transactions.
This system enables individuals to finance urgent and significant projects, stimulates domestic production, and fosters economic growth.
The statement read:
NICA emphasised the critical role of an effective consumer credit system in fostering economic growth. Such a system would enable individuals to purchase goods and services on credit, reducing the need for cash transactions.
It also facilitates financing urgent and significant projects, ultimately stimulating domestic production.
However, Nigeria’s path to acquiring consumer credit is fraught with challenges. Among these are the stringent demands for collateral, which many small and medium-sized enterprises (SMEs) cannot meet, the reluctance of banks to offer long-term loans, and the burden of high interest rates.
These obstacles have stifled the ambitions of numerous entrepreneurs and regular income earners and deepened financial exclusion, particularly among grassroots communities, according to NICA.
NICA also stresses the importance of making consumer credit services accessible to a broader population segment, including the informal sector, low-income earners, artisans, and SMEs. By extending credit to these crucial economic players, the initiative aims to enhance the resilience and growth of the Nigerian economy.
