High MPR, Lack Of Collateral Force Lenders To Rethink SME Credit Models

The high Monetary Policy Rate (MPR) and the inability of most small businesses to provide collateral are forcing Nigerian lenders to rethink traditional credit models, shifting from asset-backed lending to cash-flow, joint liability and invoice discounting models.
Speaking at Zitra Investments media briefing held at the weekend in Lagos, the managing director, Tunde Obadero, said lending rates remain a direct function of MPR, and while rates have moderated slightly, the current level still constrains productive SME lending.
“Interest rate is a function first of the Monetary Policy Rate. Thankfully, banking rates for lending have gone down slightly. We know that there’s still more room...