By Prof. Chris Onalo, Registrar/CEO, NICA
In today’s evolving economy, Credit Economy Advocacy (CEA) has become an essential agenda for national and subnational economic growth and development in Nigeria. As Nigeria seeks sustainable pathways to expand economic opportunities and empower its citizens, one more strategic move stands out: the establishment of State-Level Credit Guarantee Corporations (SCGC) across the federation of Nigeria to compliment the federal government’s effort, and support economic drive of their residents.
A State Credit Guarantee Corporation have the potential to transform how businesses and individuals in its jurisdiction can have access to credit. By providing guarantees to lending institutions, SCGC can reduce the risk associated with lending to Micro, Small, and Medium Enterprises (MSMEs) and low-income individual residents in the state. This single intervention can unlock capital that would otherwise remain inaccessible, enabling thousands of businesses owned by residents to grow, innovate, and contribute meaningfully to the economies of the State.
Beyond credit access, the impact on job and wealth creations and economic growth are immeasurable. When entrepreneurs have to access funding, they expand their operations, employ more people, and stimulate market activities. For a State government seeking to energize local economies, reduce unemployment, and support home grown industries, a State-Level Credit Guarantee Corporation becomes a powerful catalyst.
Importantly, a State Credit Guarantee Corporation can also advance financial inclusion, especially for underserved communities that remain excluded from traditional borrowing services. By guaranteeing loans for this segment of the population, State Governments in Nigeria can help reduce poverty, empower households, and bring more residents into the formal economy. Any State Government in Nigeria that already have equivalent agencies in this regard can simply restructure their mandate to accommodate Credit Guarantee Services concept, upscale its capitalization, and back it up with appropriate state legislations.
A crucial element of this advocacy is the need to compliment the Federal Government-owned National Credit Guarantee Company (NCGC). While the NCGC plays a vital national role, its resources alone cannot adequately serve the credit needs of all Nigerians. The state governments are closer to the people, understand their unique economic challenges, and are better positioned to address local business growth. As a specialist institution for credit guarantee operations component of credit management profession, NICA is, therefore, strongly positioned to advocate for replicating the federal credit guarantee scheme model at the state level is not only relevant, but highly pertinent, ensuring balance, inclusiveness, and a deeper sense of ownership in the governance of state economic affairs.
As a Chief National Credit Officer by virtue of NICA Act No. 26 of 2022, I am certain that such decentralization of economic empowerment programme can significantly create a healthier and more responsive credit ecosystem across Nigeria. NICA is therefore at it again, strongly advocating for the establishment of State-Level Credit Guarantee Corporation by every State in the Country. These entities may be christened, for example, as: Lagos State Credit Guarantee Corporation, Akwa Ibom State Credit Guarantee Corporation, Kano State Credit Guarantee Corporation, Kogi State Credit Guarantee Corporation, Rivers State Credit Guarantee Corporation, Nasarawa State Credit Guarantee Corporation, and so on, across the federation of Nigeria.
Another compelling advantage of having State-based Credit Guarantee Corporation is the ability to provide state-specific solutions. Each state can tailor its services to its local economy, which includes, agriculture, manufacturing, health, trade, technology, transportation, or services, ensuring that credit flows to economic sectors with the greatest developmental impact.
For State governments, the benefits extend even further. Credit accessibility encourages economic diversification and industrial revolution, reducing overreliance on the dwindling and problematic oil revenues by stimulating growth in other productive sectors. State governments in Nigeria can also earn additional financial revenues through loan-risk sharing (guarantee) service fees and interest income, while nurturing an improved credit culture that encourages responsible borrowing, reduces loan defaults, and inculcates the virtue of honesty, integrity and trustworthiness in the life of business-owners, which are critical requirements for any decent society.
To bring these institutions to life, state government will need a strong State legislative frameworks, adequate capitalization, and an efficient technology- driven operational structure, developed in partnership with credit economy management professionals. Building capacity in credit risk assessment, loan processing, and portfolio management will also be essential to sustain the Credit Guarantee Corporations established by State governments in Nigeria.
Ultimately, establishing State-Level Credit Guarantee Corporation throughout the Federation of Nigeria is not just an economic growth strategy thesis, it is a bold and timely step toward unlocking the full potential of Nigerian entrepreneurs, making the Country a truly economic powerhouse in Africa. With coordinated effort at both federal and state levels, Nigeria can stimulate a robust economic growth, empower businesses, create jobs, and promote financial inclusion for millions of residents across the 36 States in the country, and FCT, Abuja.
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Professor Chris Onalo is Nigeria’s renowned credit economy management expert, dubbed as “Mr Credit”, Prof. Onalo is the Registrar/CEO of the National Institute of Credit Administration (NICA), chartered, established by Parliamentary act no. 26 of 2022; formerly, “Institute of Credit Administration (ICA)”, founded in 1992. NICA act empowers the institute to advice government and make recommendations on all matters relating to credit management in the country.
NICA website – www.icanigeria.net, Email: registrar@icanigeria.net, Phone: +234-8034030160
Why Business Owners are Joining the Membership of National Institute of Credit Administration (NICA)
Business owners are joining the National Institute of Credit Administration (NICA), chartered, for several compelling reasons.
Membership with NICA offers professional recognition and entrepreneurial credibility in credit and business management, setting members apart from non- members. As a chartered professional regulatory body, NICA is recognized and legally positioned to operate like other global professional bodies, controlling, supervising, and regulating credit management profession in Nigeria, as well as advising the government at all levels on matters relating to credit economy management in the country.
NICA provides training and development opportunities, enhancing members’ credit management skills and knowledge. The institute’s Mandatory Credit Management Academic Improvement Programme (MCMAIP) and Credit Managers Roundtable, equips members with extensive knowledge of credit management, making them more competitive in the local and global job markets.
NICA offers a platform for members to network with industry professionals, entrepreneurs, business leaders, and small business owners, fostering business growth and collaboration. Members can participate in conferences, workshops, and other events, expanding their professional and business network.
Membership with NICA enhances career prospects, as employers recognize the value of NICA-certified professionals. NICA’s global membership initiative also provides opportunities for international recognition and career advancement as they enjoy access to exclusive resources, including credit management tools, research reports, and industry insights. NICA also offers discounts on training programs, conferences, and other events.
NICA’s advocacy and commitment to promoting credit economy development, people-centred credit accessibility, and national jobs and wealth creation is truly commendable. By advocating for consumer credit administration frameworks, NICA plays a vital role in shaping Nigeria’s economic landscape.
NICA’s dedication to credit economy development and people-centred credit accessibility sets it apart from other institutes in Nigeria and worldwide. Its commitment to excellence and innovation has earned it a reputation as a leading voice in credit administration.
NICA’s work has far-reaching implications for Nigeria’s economic future, making it an essential partner in the country’s development journey.
By joining NICA, business owners contribute to the growth and development of Nigeria’s economy, promoting credit management best practices and standards. Overall, joining NICA, chartered, offers business owners a competitive edge, enhanced credibility, and access to valuable resources and networking opportunities.
You can reach out to NICA for membership through this email: registrar@icanigeria.net or visit NICA website www.icanigeria.net or call this number 08034030160.
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