Nigria’s statutory body for the control, supervision and regulation of credit management profession, the National Institute of Credit Administration (NICA), has said that availability of loans at low interest rates and flexible repayment terms would 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 would encourage intending and existing business owners to borrow to start new businesses, while expanding existing ones.
According to the institute, businesses in advanced countries are well positioned to compete better, adding that even in other countries, businesses expand because of access to low interest rate loans, which are usually lower single digits.
The statement read: “It is difficult for businesses to break even with high interest rate loans, because the Small and Medium Enterprises (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 options.”
This is the ideal situation that will boost a business-friendly environment.” The institute advocated 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.
