Access to credit remains one of the biggest challenges facing businesses in Nigeria, with many entrepreneurs struggling to secure loans from commercial banks despite rising demand for funding.

Financial experts say the problem is not only limited to high interest rates, but also strict lending conditions, collateral requirements, and risk assessments that many small and medium-sized enterprises (SMEs) fail to meet.

Banks often require strong financial records, consistent cash flow, and collateral assets conditions that many informal and early-stage businesses cannot provide.

Analysts also point to rising default risks in the economy as a key reason lenders have become more cautious in disbursing credit.

In addition, inflationary pressure and currency instability have made banks more conservative, as they seek to protect their balance sheets from potential losses.

Experts argue that the situation is limiting business growth, job creation, and overall economic expansion, particularly in the SME sector which forms a large part of Nigeria’s economy.

Stakeholders are calling for credit reforms, improved credit scoring systems, and government-backed loan guarantees to bridge the financing gap.