Despite the heavy lending by banks to investors to finance various businesses in Nigeria, the level of credit penetration in the country is still below 30 per cent, which is below the Africa average of 57 per cent.
Speaking at a press briefing to announce the planned inauguration of new products by CRC Credit Bureau in Lagos on Tuesday, the company‘s Managing Director, Mr. Tunde Popoola, disclosed that the global average of credit penetration was 132 per cent.
He noted that small and medium scale enterprises did not have enough access to bank credits to enhance their growth, and that of the entire economy. According to him, no meaningful growth can be recorded in the economy without the contribution of the SMEs since they contribute about 50 per cent to the gross domestic products of the world, and forms 99 per cent of global business.
He said, ‘‘It is very sad to observe that credit penetration in Nigeria is still below 30 per cent, while the average for Africa is 57 per cent. The global average is 132 per cent. That is to say that the vast chunk of the billions of naira loans disbursed in the country go to the large firms and highly rated individual customers. “We are still a cash and carry economy, and this limits our production and consumption levels and capabilities.‘
‘‘It is a proven fact that if any significant growth in the economy is expected, SMEs must access finance for take-off and smooth operation. Funds are to a business what blood is to a living organism, so the assertion goes. It goes without saying that SMEs need adequate and reasonable access to credit to make them a veritable engine of growth and social transformation.‘‘