High interest rates and stringent collateral demands are choking Nigeria’s small and medium enterprises (SMEs) during their critical formative years, warns Ernest Azudialu-Obiejesi, Group Managing Director of Nestoil Group.
Speaking on the financial barriers facing new businesses, Azudialu-Obiejesi criticized the steep interest rates that prevent many SMEs from accessing essential funding, thus stalling their growth and sustainability.
“Punitive interest rates and excessive collateral demands are crushing SMEs in Nigeria before they even have the chance to thrive,” he said. With limited access to affordable loans, young businesses often struggle to cover basic operational costs, preventing them from reaching their full potential and contributing to the economy.
Azudialu-Obiejesi also highlighted how these financial burdens hinder innovation, productivity, and job creation, all crucial to Nigeria’s economic progress. He called for reforms to make financing more accessible to SMEs, which represent a substantial share of employment opportunities and economic growth potential in the country.
As economic uncertainty continues, industry leaders like Nestoil’s GMD are urging financial institutions and policymakers to reconsider the conditions for SME financing, fostering an environment where small businesses can not only survive but also flourish.