Pay SMEs before 14 days, NICA urges creditors

The National Institute of Credit Administration (NICA) on Sunday urged large corporations and multinationals to promptly settle debts owed to Small and Medium-Scale Enterprises (SMEs) within seven to 14 days.

The institute made the call in a statement by its Registrar, Prof. Chris Onalo.

The institute is Nigeria’s statutory body for control, supervision and regulation of the credit management profession.

Onalo urged creditors to ensure that all payments were made to suppliers and other stakeholders they owe within seven to 14 days.

Onalo said that SMEs, constituting a significant portion of the nation’s economy, often lack substantial financial resources, necessitating timely payments from larger entities.

He advocated for legislation to safeguard SMEs against delayed payments,

“If SMEs supply something, within seven days to 14 days, you should be able to pay the invoice. Don’t subject them to your own internal policies that you cannot pay them until after 30 days.

“You know, these people borrowed money to execute the order that you gave to them, and you are now saying to them, you will pay them after one month; that is not fair. So, we need to have a national consensus.

“We need the legislation, where the small and medium scale enterprises which form the bulk of the economy, should have the invoice presented and get paid within seven days,” he said.

According to him, this will enable the SMEs to utilise the money for more businesses and increase¹ revenue because they often times borrow these funds.

Onalo observed that the SMEs pay rents, operational running costs and other things and should not have their monies tied down.

He said the institute would embark on campaign to encourage creditors to pay debts owed Small and Medium-Scale Enterprises (SMEs) within 14 days.

The chief executive officer said the planned ‘National Pay Your Bill Month’ Campaign, aims to help creditors to do things right.

“The national campaign will create awareness that if you are indebted to anybody, be it business indebtedness or individual indebtedness within that month, you should repay.

“The institute will emphasise the need for you to appeal to your conscience to pay what you are owing the next person. Even if you can’t pay all, pay something, so that is part of the awareness creation,” he said.

Onalo added that the institute was coming up with strong support for growing businesses, especially the Small and Medium Scale Enterprises.

He said NICA would enlighten multinationals, blue chips, conglomerates, financial institutions and other stakeholders to let them know it was bad to delay payment of invoice of the SMEs.

“That is part of the awareness. We plan to make sure that people begin to see credit economy as the best system that stimulates economic wide growth involving all sectors of the economy,” Onalo said.