The National Institution of Credit Administration (NICA) talked about the negative effect of restricted access to credit on the expansion of business, production capabilities which has worsen the poverty levels across Nigeria.
In a recent statement, NICA said in a recent statement 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.
“In the country, consumer credit has been bedevilled by challenges such as the demand for collateral by the lending institutions which many of the SMEs lack, unwillingness of banks to give out long-term loans, and high interest rates among other challenges.
“These have hindered the dreams of many ambitious entrepreneurs and regular salary earners from expanding their businesses or acquiring other household items.
“It has also worsened financial inclusion, most especially at the grassroots.
“Poor credit access hinders business growth, reduces production capacity, and adds to the poverty level in the economy.
“To support the growing economy and unlock Nigeria’s economic potential, credit availability should be prioritised.”
