The Nigerian Institute of Chartered Accountants (NICA) has called on the Federal Government to inject N2 trillion into the Credit Guarantee Company to enhance access to credit for businesses and individuals across the country.
NICA's Recommendation
According to NICA, the injection of N2 trillion into the Credit Guarantee Company would significantly reduce the risk for lenders, thereby encouraging them to extend more credit to borrowers. This move is expected to stimulate economic growth by providing much-needed capital to small and medium-scale enterprises (SMEs) and other key sectors.
The call was made by the President of NICA, who emphasized that the Credit Guarantee Company plays a crucial role in de-risking lending and expanding the credit base of the economy. The N2 trillion injection would enable the company to guarantee more loans, thereby increasing the volume of credit available to businesses and individuals.
Impact on the Economy
NICA believes that the proposed injection would have a multiplier effect on the Nigerian economy. By improving access to credit, it would empower entrepreneurs, create jobs, and boost productivity. The institute also noted that the move aligns with the Federal Government's efforts to promote financial inclusion and economic diversification.
Furthermore, NICA highlighted that the Credit Guarantee Company is a vital tool for addressing the financing gap in the country, particularly for SMEs, which are often constrained by a lack of collateral and high interest rates. With a stronger credit guarantee framework, more businesses would be able to access affordable credit, fostering innovation and expansion.
Call to Action
NICA urged the Federal Government to prioritize this initiative in its fiscal policy and ensure the necessary funds are allocated in the national budget. The institute also called for transparency and efficiency in the management of the Credit Guarantee Company to maximize the impact of the proposed injection.
The Federal Government has not yet responded to NICA's request, but stakeholders are optimistic that the recommendation will be considered as part of ongoing efforts to strengthen the economy and support private sector growth.
