Improving SME Credit Access Key to Economic Growth, Says Tony Elumelu
Chairman of the United Bank for Africa (UBA) Group and founder of the Tony Elumelu Foundation, Tony Elumelu, has once again drawn national and international attention to the critical need for expanded credit access as a cornerstone for boosting the growth of small and medium-sized enterprises (SMEs) across Nigeria and Africa.
Speaking at the 49th Governing Council meeting of the International Fund for Agricultural Development (IFAD) in Rome, Elumelu underscored how restrictive lending practices and stringent regulatory requirements are choking the life out of entrepreneurial ambition and hindering the ability of SMEs to scale, innovate, and create jobs.
His candid assessment of the current credit landscape highlighted how commercial banks are often willing to lend but are hamstrung by regulatory compliance rules that require heavy collateral and clear repayment histories, conditions that many young business owners cannot practically meet.
This, he explained, creates a barrier where risk-averse lending and capital charges deter institutions from providing the type of long-term, risk capital that small enterprises desperately need to thrive.
High borrowing costs where commercial loan interest rates often exceed 29–36 per cent compound these obstacles, placing significant strain on SMEs that are already grappling with inflationary pressures and operational challenges.
Elumelu drew attention to the irony that institutions designed to bridge financing gaps, such as development finance institutions (DFIs), still impose requirements beyond the reach of many entrepreneurs, effectively limiting their ability to catalyse meaningful economic growth.
Elumelu has consistently advocated for a system that recognizes the private sector especially SMEs as the engine of sustainable development. He pointed to the Tony Elumelu Foundation’s own interventions, including non-refundable seed capital provided to thousands of startups across Africa, as evidence of how targeted financing can unlock potential where traditional banking falls short.
Advocates argue that bridging Nigeria’s financing gap for small businesses will require not just new capital sources but also regulatory reforms that encourage lenders to take calculated risks without jeopardizing financial stability. Many stakeholders stress the need for interest rate structures and lending criteria tailored to the realities of smaller enterprises, which differ markedly from those of large corporates.
Beyond the financial specifics, Elumelu’s message conveys a deeper economic imperative: SMEs are vital to job creation, economic diversification, and inclusive growth.
Without deliberate actions to improve credit access, a significant segment of Nigeria’s entrepreneurial ecosystem could remain underfunded and underutilised, slowing the nation’s overall development. Elumelu’s advocacy signals to policymakers, financial institutions, and business leaders that enhancing credit flows to SMEs is not merely a financial issue but a strategic national priority with wide-ranging implications for employment, innovation, and wealth creation across Nigeria and beyond
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