• Sunday, May 26, 2024
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BusinessDay

Business failure in Nigeria due to unfriendly credit system: A farmer’s perspective

Farmers

High Interest rates, inadequate loan tenor, absence of feasible moratoria and general access to credit are the bane of the business climate in Nigeria.

I am not by any means an expert in finance or credit management but street smart, innovative and gently entrepreneurial.

The start-up or the creation of a small business may not be difficult with the ease in meeting statutory conditions today but expanding and sustaining it is quite difficult largely due to the cost of finance and credit administration in the overall economy.

Very often the business simply dies within a few months because the financial institutions are not attuned to the wealth or job creation principles in a third world growing economy.

The promoters of the financial institutions are often times more concerned about their profit rather than building the businesses they finance.

In many cases the financial institutions are not sympathetic to the difficulties being experienced by the small businesses but rather more concerned with loan repayments and the high interest rates accompanying the loans.

The business climate in Nigeria today is so turbulent that no business is really thriving. The effect of the COVID-19 pandemic, insecurity and the general low purchasing power of the average Nigerian all together lead to business failure.

Regardless of the CBN Governor’s open call to the banks and financial institutions to extend moratoria and reduce interest rates, the situation is still very dire for the small business in Nigeria. The Government has to intervene to really get the small businesses out of the woods to avert total National economic collapse.

As the Government is opening so many windows of support to Agricultural enterprises it is prudent to shore up the purchasing power of the average Nigerian as well as the financial institutions’ management apparatuses to make Agribusiness sustainable.

You must sympathize with the typical administrator when he or she posits that there is no hunger in Nigeria but a weak purchasing power of the average Nigerian!

Ibrahim is national president, All Farmers Association of Nigeria (AFAN)