The National Institute of Credit Administration (NICA) chartered, has commended Federal Government for taking the bold step to establish the National Credit Guarantee Company.
Although the establishment of the Institution should have taken place before now, it has nevertheless come at the most auspicious time. With the NCGC and Credicorp (which is Consumer Credit Corporation), both of which are established by the present Federal Government, Nigeria is set to soon lead a new economic development frontier in Africa.
As a professional statutory body for the control supervision and regulation of credit management profession in Nigeria, NICA is ready to provide needed support that will enable NCGC deliver on its mandate through collaboration, cooperation, and partnership for professional competence building, ethical management of the mandate note, embracing innovative best practices, alignment with global standards, and proactive response to incompatible behaviors from participating stakeholders.
The establishment of the National Credit Guarantee Company (NCGC) by the Federal Government is a significant step towards boosting Nigeria’s economy and potentially kickstarting the journey of industrialization. The purpose of any credit guarantee company, by way of awareness creation, is to:
– Increased Access to Credit: The NCGC will provide risk-sharing instruments for financial institutions, encouraging them to extend more credit to individuals and enterprises, particularly micro, small and medium-sized enterprises (MSMEs).
– Promote Economic Growth: By increasing access to credit, the NCGC aims to stimulate economic growth, drive re-industrialization, and improve living standards for Nigerians.
– Targeted Support: The initiative will focus on supporting underserved groups, including women and youth, to promote financial inclusion and reduce poverty.
– Collaboration: The NCGC will operate through a collaborative framework involving government agencies, professional credit management institutions, private companies, and international organizations to create a robust risk- sharing ecosystem and capacity building.
Some key benefits of the NCGC include:
– Simplified Loan Process: Easier access to loans for micro and medium-sized small businesses and individuals, potentially leading to more new businesses and growth of existing ones.
– Job Creation: NCGC promotes increased access to credit can lead to more investments in various sectors, creating jobs and boosting local industries.
– Financial Inclusion: The initiative aims to bring more Nigerians into the financial system, reducing poverty, bridging economic gaps and contributing to the GDP.
– Lower Interest Rates: By sharing risks with credit providers, the NCGC may lead to lower interest rates and fewer or no collateral requirements, making loans more affordable.
While it’s too early to declare the journey of industrialization has fully started, the establishment of the NCGC is a promising step towards achieving that goal. The company is expected to commence operations before the end of the second quarter of 2025.
