The Institute of Credit Administration, ICA, has called on the President-elect, General Muhammadu Buhari, to set up a national agency that guarantees access to loans by SMEs, and not to disburse loan to them. In a recommendation to GMB, made available to FV, signed by Registrar/CEO, ICA, Prof. Chris Onalo, “Such agency can be called – Nigerian Credit Guarantee Corporation (NCGC). Surprisingly, up till today, Nigerian government is still not dreaming of creating this national platform that would support the development of SMEs.”

Onalo pointed out that the corporation would serve as collateral and security for SMEs who want to borrow money and do not have, only if the NCGC is set up by the federal government with strong capital base and very robust operating fund.

“This is the practice in other countries. The well-functioning of credit in any economy is a pre-condition for enterprise and trade to develop and thrive. The granting and state of credit in any economy has important implications for both financial stability and private sector sustainability. As Nigeria’s economy is still susceptible to external shocks, the well-functioning of credit is crucial for our economy to grow.

“We must bring it to your attention that the poor attitude to credit, especially to public loans provided by government’s development finance institutions, and lack of a robust regulatory regime for the DFI sector to operate is a fundamental threat to the health of the Nigerian economy. Your government is expected to be committed to enhancing the regulatory regime; your government is expected to enhance credit regulations by providing greater protection for the country’s DFIs,” he said.

Other recommendations include: First among your priorities should be to address the nation’s urgent economic, social and security situation, and to build a strong economy for the future; Your approach no doubt should be to focus very quickly on structural reforms, fiscal responsibility and investment; You will quickly gain local and global acceptance if you drastically cut cost of doing business in Nigeria;

The Central Bank of Nigeria is too saddled with too many things, you may need to look at this; There is need to stream down the functions of the Central Bank of Nigeria to make it more functional and efficient with its traditional monetary policy moderation mandate; Nigeria must engage free market economy in order to achieve overall resilience in economic activity, employment and fiscal performance; among others.