SMEDAN Lists How Nigerian Entrepreneurs Spend Business Loans “They Take It and Disappear”
- SMEDAN says many Nigerian entrepreneurs are diverting MSME loans for other uses
- The agency says loan defaults are weakening funding schemes, as some beneficiaries refuse to repay
- SMEDAN warns poor repayment culture threatens access to finance for genuine SMEs
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The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has raised concerns over widespread loan diversion by some Nigerian entrepreneurs, saying many beneficiaries of MSME funding schemes fail to repay and often disappear after collecting the funds.
Source: Getty Images
SMEDAN’s Director-General, Charles Odii, said a major challenge facing small businesses in Nigeria is poor loan repayment culture, with several borrowers diverting funds meant for business expansion to personal expenses.
Odii disclosed this on Thursday at the People’s Roundtable Conference, where he was represented by Charity Abah, deputy director in the agency’s Enterprise Development and Promotion Department.
According to him, although SMEDAN does not give out loans directly, it acts as a middleman between MSMEs and financial institutions, facilitating access to funding under various programmes,
Odii said:
“One basic challenge we have had over the years with MSMEs is that when Nigerians take loans, they don’t want to repay. Some people collect these loans and divert them.”
SMEDAN listed common ways some entrepreneurs misuse business loans to include:
- Buying cars and other personal assets
- Funding weddings and family ceremonies
- Marrying additional wives
- Spending on non-business lifestyle expenses
- Disappearing or changing addresses to avoid repayment
He noted that many of the loans are structured as revolving funds meant to be repaid and re-issued to other entrepreneurs, but persistent defaults have weakened the sustainability of such schemes.
He added,
“We discovered that many people see these loans as their own share of the national cake. They take it and disappear."
Odii attributed the trend largely to character and accountability issues.
Source: Getty Images
Also speaking at the event, the Director-General of the Citizenship and Leadership Training Centre (CLTC), Rinsola Abiola, lamented the widening gap between leaders and citizens, saying youth agitation should be viewed as an expression of concern for Nigeria’s future.
She said citizenship goes beyond complaints and requires deliberate actions by Nigerians, especially young people, to assert their power and responsibilities in nation-building, Leadership reports.
In his welcome remarks, the convener of the People’s Roundtable, Emmanuel Ayantayo, represented by Oladeji Adesola, said the forum was created to bridge Nigeria’s knowledge gap through open dialogue, shared experiences, and actionable collaboration between policymakers, professionals, educators, and citizens.
Credit scheme to borrow up to N5m
In a related development, Legit.ng reported that the Nigerian Consumer Credit Corporation (CREDICORP) has launched YouthCred to make loans available for Nigerian youths.
The national loan scheme allows young people to access up to N5 million as part of efforts to help them actualise their dreams with ease.
Uzoma Nwagba, the managing director of CREDICORP, said the credit scheme is a revolution and a movement that will start a credit culture in Nigeria.
Source: Legit.ng
