Credit guarantee awareness key to MSME growth — NICA CEO
National Institute of Credit Administration NICA
Nike Popoola
The Chief Executive Officer of the National Institute of Credit Administration (NICA), Prof. Chris Onalo, has spotlighted a critical disconnect between young Nigerian entrepreneurs and their awareness of credit guarantee opportunities, which is stifling access to finance for countless viable business ventures.
Speaking as a high-profile panelist at the inaugural Stakeholders Forum of the National Credit Guarantee Company (NCGC) held in LAGOS today, Onalo stressed the urgent need for knowledge, mentorship, and capacity building among the nation’s Micro, Small, and Medium Enterprises (MSMEs) and youth-led startups.
“Credit guarantees exist primarily to cushion the risks for lenders when borrowers default,” he explained. “More importantly, they serve as an incentive for banks and financial institutions to support promising projects that lack traditional collateral, or do not have a suitable record of financial transactions to prove that they are creditworthy.”
According to him, the government’s loan schemes are typically split into two types: investment loans for acquiring fixed assets, and working capital loans to support day-to-day business operations. These interventions aim to bring MSMEs and young entrepreneurs into the formal economic fold, thereby strengthening their contribution to Nigeria’s GDP.
However, Onalo issued a stern warning: “Credit guarantees are not a national cake to be shared indiscriminately. Only those with verifiable, well-structured business proposals who are otherwise excluded from conventional loans due to lack of collateral should benefit.”
To close the existing knowledge gap, he called for targeted credit and financial literacy programmes. “Understanding key concepts like credit risk, business documentation, and financial management is essential. Without this knowledge, many young entrepreneurs will remain excluded from sustainable financing,” he added.
Also speaking at the forum, the Managing Director of the National Credit Guarantee Company (NCGC), Mr. Bonaventure Okhaimo, emphasized the role of the newly formed institution in de-risking the lending ecosystem.
“With an initial capital base of N100 billion, NCGC was created to complement ongoing efforts by development finance institutions, commercial banks, and government schemes aimed at easing access to credit,” Okhaimo stated.
He explained that NCGC does not lend money directly but provides partial credit guarantees, covering a portion of loan defaults. “This strategic intervention gives financial institutions the confidence to extend more credit, knowing that part of the risk is shared with us.”
