A financial expert, Mr Gbemi Adelekan, has advised Micro, Small and Medium Enterprises (MSMEs) to ensure a solid repayment history to enhance their credit scores and improve their access to funding.
Adelekan, also the Chief Executive Officer of KwikPay Credit, gave the advice on Saturday in Lagos in an interview with the News Agency of Nigeria (NAN).
KwikPay Credit is a financial services provider and licensed lender by Trafalgar Associates, approved by the Federal Competition and Consumer Protection Commission (FCCPC).
Adelekan said that in Nigeria, accessing credit facilities was crucial for individuals and enterprises to meet various financial needs and increase circulation of disposable income and engender business sustainability.
He emphasised that a strong repayment history would enhance access to higher levels of funding that would enable expansion of small businesses into larger enterprises and increase their performances.
'A short-term loan with a solid repayment history can significantly enhance your credit score in a short period.
'This improvement in your creditworthiness opens up greater opportunities to secure larger loan amounts in future applications,' he said.
Adelekan said that short and quick loans had helped many small businesses to navigate murky economic terrains, particularly those operating under the informal bracket.
'An ice block maker, that hair dresser on the street, the welder whose machine needs to work and other artisans may be unable to go to big banks or development finance institutions to ask for small loans.
'They may not have the requisite paperwork. Accessing small and quick loans online has saved many of these businesses from collapse.
'Fortunately, the money lending sector is fully regulated by the FCCPC, and the rights of borrowers are very much protected,' he said.
He said that non-repayment of loans had adverse effects.
'Owing money for a long time and watching the interest accrue on such a facility can have a psychological effect,' he said.
Source: News Agency of Nigeria