Expert Warns Nigeria’s N13 Trillion Credit Readiness Gap Hindering SME Growth

Oluchi Chibuzor

A recognized industry expert is warning that Nigeria’s persistent N13 trillion SME financing gap is being fundamentally misunderstood, arguing that the crisis is not a lack of available capital but a catastrophic lack of “credit readiness” among the nation’s small businesses.

Speaking with Journalists recently, a management consultant and Fellow of the Institute of Management Consultants, Idris Ibiyemi, argues that until policymakers and banks address the root causes of poor financial hygiene within the SME sector, billions in potential funding will remain locked away, stifling economic growth.

His warning is coming as a survey released by PwC in 2024 highlighted a staggering $32.2 billion (approx. N13 trillion) unmet demand for credit by Nigerian MSMEs.

While this is often framed as a failure of banks to lend, Mr. Ibiyemi’s work suggests the problem lies with the data businesses are providing.

“We are focusing on the wrong end of the problem. The capital is there, but the vast majority of our SMEs are simply unbankable. They are trapped in a state of financial fog, unable to produce the clean, auditable records that are the non-negotiable entry ticket to formal credit.”

Mr. Ibiyemi, whose innovative management frameworks have been adopted at both local government and commercial banking levels, has focused his work on solving this exact issue.

He asserts that the commingling of funds and a lack of structured project management are the primary drivers of this unbankable status.

His solution involves imposing simple but mandatory disciplines, such as requiring a separate bank account for each major project. A Leading bank’s SMEs that have adopted his system have shown a remarkable 40% reduction in loan default rates, prompting the bank to make training on a creditworthiness statement he originally designed a ‘mandatory pillar of our risk assessment policy’.

Highlighting the challenges Ibiyemi stressed that “if we continue to throw money at SME funds and financing schemes without first building the auditable foundation that allows banks to lend safely. We must shift our national focus from access to finance to ‘readiness for finance.’ Until we do, that N13 trillion gap will remain a permanent feature of our economy.”