In a move aimed at revitalising the Nigerian economy, the National Institute of Credit Administration (NICA) has called on the Federal Government to establish a comprehensive credit guarantee system to aid struggling businesses across the nation.
This initiative is designed to usher in a new economic dimension characterised by enhanced productivity and the rapid development of cottage industries, informal sectors, and small to medium enterprises (SMEs).
Reason for the system
The statement, released by Prof. Chris Onalo, the Chief Executive Officer of NICA, emphasises that this new economic strategy will not only redefine the Nigerian economic landscape but also significantly boost production capacities.
According to the statement, a national credit guarantee system would not only enhance credit accessibility for individuals and businesses but also ensure that this access is complemented by integrity and the availability of requisite personal and corporate credit information.
Onalo 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.”
He also highlighted the importance of maintaining a good track record in terms of integrity and honesty, as these qualities will be crucial in determining creditworthiness under the new system.
More Insights
- NICA earlier stressed the urgent need to enact robust legislation to instill discipline, decency, and honesty within Nigeria’s credit framework.
- The Federal Government earmarked an N100 billion Consumer Credit Fund for the 2024 national budget in an effort to stimulate economic growth and enhance the welfare of the populace.
- Also, the Federal Government established a Technical Working Group through the Presidential Council on Industrial Revitalization. This group, which includes representatives from the Central Bank of Nigeria (CBN), the National Identity Management Commission (NIMC), and the Federal Competition and Consumer Commission (FCCPC), is tasked with formulating a comprehensive framework to bolster consumer credit facilities across the country.
