The President of the Money Lenders Association, Mr. Gbemi Adelekan, has raised concerns over the increasing number of bad debts among Micro, Small, and Medium Enterprises (MSMEs), stating it is limiting their chances of accessing credit and growing their businesses.
In a statement on Monday, Adelekan noted that many MSMEs continue to take out microloans from multiple sources despite already being in debt, leading to poor credit histories.
“Most licensed lenders in Nigeria consult credit reports from CBN-approved credit bureaus,” he explained. “A poor credit profile makes it difficult to secure loans for business or emergencies, and often results in higher interest rates or outright denial.”
He emphasized that maintaining a good credit record is crucial for MSMEs, especially those with limited capital, adding that digital lenders now use machine learning and data analysis to assess borrower risk.
According to Adelekan, about 40% of over 1,000 loan applications received daily by his company, Kwikpay Credit, are from individuals or businesses with bad credit.
To help address this, his company plans to launch a loan product linked to financial education. This product will encourage repayment of outstanding loans with other lenders and use additional factors like education and income to determine eligibility.
He concluded by stressing the need for a national push toward financial literacy to help MSMEs avoid debt traps, improve credibility, and gain access to critical funding.
#MSMEs #CreditScore #BusinessLoans
