Lagos: Credit expert, Mr. Gbemi Adelekan, has warned that a negative credit profile could hinder Micro, Small, and Medium Enterprises (MSMEs) from accessing vital financial opportunities. Adelekan, who also serves as the President of the Money Lenders Association (MLA), made this known during an interview with the News Agency of Nigeria (NAN) in Lagos.
According to News Agency of Nigeria, a healthy credit profile is essential for building financial wellbeing, serving not only as a financial record but also as a powerful business asset. It involves understanding various aspects of finance, including budgeting, responsible borrowing, and maintaining a good credit history and track record. Adelekan highlighted a concerning trend observed by digital money lenders in Nigeria, where individuals move from one lender to another for funding despite having bad debts with previous lenders.
For MSMEs, which often operate with limited capital and tight cash flows, maintaining good credit is crucial for growth. Adelekan revealed that money lenders, including banks, financial technology firms, and cooperatives, now use technology to assess the riskworthiness of borrowers. A healthy credit history, he noted, simplifies the process of getting funding approval, negotiating better interest rates, and accessing larger loan amounts when needed.
Many digital lenders in Nigeria and across Africa rely heavily on data and credit scores to approve loans. MSMEs with multiple unpaid loans, frequent defaults, and poor repayment records are often blacklisted or disqualified from future opportunities. Adelekan emphasized the importance of credit checks, stating that most licensed lenders in Nigeria consult credit reports from Central Bank of Nigeria (CBN) approved credit bureaus before approving a loan application.
Adelekan, who is also the Chief Executive Officer of Trafalgar Associates, owners of Kwikpay Credit, revealed that out of over 1,000 personal and business loan applications received daily nationwide, nearly 40% have a bad credit history. He stressed the need to reduce this figure to restore access to financing, protect business credibility, and open doors to growth opportunities.
The company plans to assist customers with an upcoming loan product service linked to financial education and wellbeing, encouraging repayment of defaults with other lenders. This product will also consider additional factors such as educational background, employment, and income to assess loan eligibility. Adelekan concluded that reducing negative credit value is about restoring trust and unlocking opportunities, emphasizing that a healthy credit profile will lead MSMEs to a better financial future.