×

Most Widely Read Newspaper

Institute advocates quick payment policy for MSMEs

Local-Business

Ozioma Ubabukoh and Ife Ogunfuwa

The Institute of Credit Administration Nigeria has called on government and organisations doing business with Micro, Small and Medium Enterprises to develop a deliberate policy thrust to ensure quick payment of confirmed invoices.

In a welcome address at the institute’s Annual Mandatory Professional Development Credit Management Conference in Lagos, the President, ICA, Dr. Adetunji Oyebanji, noted that subjecting the MSMEs to long delays in making payments to them could be injurious to their businesses as the sector was fragile and had no easy access to funds due to lack of collateral.

Oyebanji, who is also the Chairman and Managing Director of 11 Plc, appealed to government at all levels and big companies to initiate policies that could support the MSMEs’ critical business activities, stressing that such policy was the key to economic activities.

He said, “We call on conglomerates, blue chips and multinationals in Nigeria to design policies that ensure quick payment of confirmed invoices from the Small and Medium Enterprises. Subjecting them to long delays in making payments could be injurious to their businesses as the SMEs are fragile, having no easy access to funds due to lack of collateral.”

While declaring open the institute’s ‘National Pay Your Bill Month Campaign,’ Oyebanji stated that the campaign would be directed at those indebted to one another, institutional, national or international debt obligations to make good their debt obligations or promises.

“We enjoin all stakeholders to lend their voices to this clarion call. The month of April every year is taken by our institute as ‘National Pay Your Bill Month’,” Oyebanji said.

Explaining the initiative further, ICA Registrar and Chief Executive Officer, Prof. Chris Onalo, said, “What this means is that everybody will be reminded that if they are indebted to any person, business to business, individual to individual, government to corporate organisations and corporate organisations to government, government to government, to pay up the whole or part of the outstanding debts.

“And the way I am looking at it, that month will produce billions of naira paid back to creditors or rightful owners. It may not be all you are indebted to but you make conscious effort to pay something that day,” Onalo said.

The theme of the conference lecture, which was ‘Using Credit to Tame Corruption – The Role of Credit Managers,’ brought together professional credit managers and experts from different sectors of the economy.

At the event, the institute’s prestigious Oil and Gas Industry Growth Driver of the Year award was conferred on the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu.

Meanwhile, fellows and members of the ICA have identified credit as the most effective tool to fight corruption in the country.

One of the ICAN fellows, Mr. Felix Aremo, said credit was an enabler, adding that no economy could develop without an effective credit system.

He noted that corruption had been a burning issue in Nigeria, “hence the need to adopt the right kind of approach and institutional framework to fight the monster.”

Aremo said that going by what credit represented, and the global acceptance of it as a modern tool for sustainable economic growth, wealth and job creation, “a credit economic system is what Nigeria needs to grow.”

He said, “The country needs it not only to get rid of corruption, but also to lay a fresh foundation that is a departure from the old order of cash and carry system.

“The objective of the sensitisation workshop being carried out by the ICA is to offer practical contributions to the current anti-corruption policy as a veritable institution, by advocating a new economic order that rests on credit pillars.

“It is also to make available a learning platform not only for professionals but for industrialists, the Small and Medium Enterprises, micro-markets, consumers of credit, victims of corrupt institutions and the less educated borrowers.”

Aremo said that a competitive economy afforded everyone the opportunity to have access to the good things of life, and subject to one’s strength of income.

“Buy today, pay tomorrow puts everyone’s integrity on trial. Similarly, businesses that extend credit to customers with good credit control and management culture tend to grow faster, expand and enjoy higher turnover in terms of repeat sales, which means that the production machines will never stop working,” he said.

He added, “In order to control corruption within the credit industry, the current credit process and system must take a new order and credit managers will have to play a central role.

“Corruption and other related factors must be identified and admitted as major risks and specific actionable strategies must be institutionalised to mitigate the risks.”

“To improve our credit management performance, the entire value chain from due diligence of the borrower to credit funding, credit utilisation and repayment must be analysed in details. Our financial institutions need to attain higher standards in terms of capacity,” he added.

Copyright PUNCH.
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH.

Contact: [email protected]

 

Stay informed and ahead of the curve! Follow The Punch Newspaper on WhatsApp for real-time updates, breaking news, and exclusive content. Don't miss a headline – join now!

Join The Punch Newspapers Channel