Tony Elumelu, chairman of UBA Group, has called for more accessible credit to unlock the potential of Nigerian entrepreneurs, highlighting how regulatory frameworks constrain commercial banks from lending to small businesses. Speaking at the 49th Governing Council of the International Fund for Agricultural Development (IFAD) in Rome, Elumelu noted that banks can lend but face strict compliance rules, including collateral and repayment verification.
The Role of Development Finance Institutions
While Development Finance Institutions (DFIs) exist to bridge the funding gap, Elumelu said their requirements often remain “beyond the reach of young entrepreneurs,” making it difficult for startups to access capital. This challenge partly motivated the creation of the Tony Elumelu Foundation, which provides $5,000 non-refundable seed capital to early-stage entrepreneurs—a sum banks cannot easily provide under current regulations.
Banking Sector Dynamics
The Central Bank of Nigeria (CBN)’s Q4 2025 Credit Conditions Survey shows mixed results: while credit availability improved for some sectors, medium-sized private non-financial corporations (PNFCs) faced tighter lending terms. Rising defaults across secured, unsecured, and corporate loans have prompted banks to adopt cautious lending policies, reflecting the fine balance between financial stability and economic growth.
Interest Rates Straining SMEs
High lending rates remain a major obstacle, with commercial loan rates ranging between 29% and 36%, putting pressure on businesses. CBN data indicates that 75% of companies identify high interest rates as their most pressing operational challenge, curtailing expansion and job creation.
Advocacy and Policy Reform
Elumelu urged governments to create an enabling environment for small businesses through policy reforms and infrastructure support. “Beyond access to finance, broader reforms are essential to unlocking entrepreneurial growth,” he said, emphasizing the importance of government and private sector collaboration in Nigeria’s SME ecosystem.
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