The National Institute of Credit Administration (NICA) has sounded the alarm on the devastating impact of high interest rates on Small and Medium Enterprises (SMEs) in Nigeria. In a recent statement, CEO Prof Chris Onalo highlighted the urgent need for lower interest rate loans to support small businesses amidst the current economic challenges.

According to Prof Onalo, SMEs are struggling to stay afloat with high-interest rate loans, coupled with other operating costs, making it difficult for them to repay their debts. He emphasized the importance of providing SMEs with access to single-digit interest rate loans with flexible repayment options to enable them to compete effectively and expand their businesses.

The call for lower interest rates comes in the wake of the Central Bank of Nigeria’s decision to raise the interest rate to 22.75 per cent in a bid to curb soaring inflation, which reached 29.90 per cent in January. However, NICA believes that this move has only added to the burden faced by SMEs and is urging for more support to create a business-friendly environment.

In light of these challenges, NICA is advocating for a more favorable lending environment for SMEs to thrive and contribute to the growth of the Nigerian economy. By addressing the issue of high interest rates, the hope is that small businesses will be better equipped to weather the economic storm and emerge stronger in the long run.