Zitra Investments Adapts SME Lending Amid High MPR

The high Monetary Policy Rate (MPR) and the inability of many small businesses to provide collateral are compelling Nigerian lenders to reconsider traditional credit models. Tunde Obadero, managing director of Zitra Investments, stated that while lending rates have slightly moderated, the current MPR still limits productive SME lending.

He expressed hope for a future sub-20 percent MPR to foster a healthier borrowing environment. Femi Okuyelu, Director of Business Development at Zitra, highlighted that only about 10 percent of adult Nigerians have access to formal credit, citing structural barriers such as lack of collateral and credit history.

Many SMEs operate informally, making conventional assessments unsuitable. Zitra has adopted a Social Business model to assist informal operators in organizing their businesses and monitoring cash flow for lending purposes.

Chief Olaotan Olumuyiwa emphasized the importance of financial literacy and the need for invoice discounting to address cash flow issues faced by SMEs. He reiterated that a sub-20 percent MPR is crucial for creating sustainable credit environments for SMEs.