PwC MSME Survey 2020
If you applied and tried to negotiate for a bank loan over the last 12 months, what was the outcome?
兰花
Half of the businesses revealed that they had applied for, and
tried to negotiate for a bank loan over the last 12 months, but
turned it down because the cost was too high. High cost of
capital is one of the biggest costs to business operations in
Nigeria.
For SMEs who had access to bank credit, commercial banks
were the main source of these funds (91.9%), while 4.7%
accessed credit from microfinance institutions, and 1% from
development institutions.
In 2019, the CBN mandated all deposit money banks (DMBS) to
maintain a loan to deposit ratio of 65%, in its bid to improve
lending to the real sector of the Nigerian economy. According to
the CBN, the policy has resulted in loans and advances rising
by over N1.1 trillion between June to October 2019. The
regulator also posits that the initiative has led to a 4% drop in
interest rates in the same period. Going forward, if the perceived
risks in real sector are high, banks may settle for the CBN's
punitive measure than embarking on significant increase in loan
and advances.
Credit bureaus have a significant role to play in providing
support to the banks in terms of providing information and
assessment of the creditworthiness of SMEs for loan
applications and disbursement. Credit bureau operations in
Nigeria began in 2003. Today, there are only three national
credit bureaus licensed by the Central Bank of Nigeria.
PwC MSME Survey 2020
PwC
50%
Applied but refused
because cost too high
Source: PwC analysis
31%
10%
10%
Applied but was
rejected
Applied and got
everything
Applied but only got
part of it
June 2020
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