Why South West Dominates Loan Distribution in Nigeria
Discover the reasons behind the South West region’s highest loan share in Nigeria in our latest loan news update.
Many Nigerians have raised questions about the percentage share of loans in the country. One Twitter user expressed her confusion, asking why the South West region received 57% of the loans while the entire North received less than 30%. This phenomenon occurred during the administration of President Muhammadu Buhari.
To shed light on this matter, another Twitter user responded with a possible explanation. The user pointed out that the South West region has the highest share of loans because it has the most registered and bankable enterprises in Nigeria.
It is crucial to understand that loans are not distributed equitably like grants or FAAC allocations. Interested entities apply for loans, which are then evaluated and approved based on certain criteria. The South West region has a higher number of companies that meet the necessary loan requirements.
In contrast, business owners in the North primarily rely on equity financing and are less inclined to apply for loans due to the interest rates involved. Additionally, those who do apply often struggle to fulfill the loan requirements for reasons that are unclear.
Therefore, it should not be surprising that the South West region dominates the loan distribution in Nigeria. To see a change and promote the North’s presence in loan distribution, we must shift our attitude towards bank loans. In today’s world, personal equity alone cannot support and sustain business growth.
If you’re interested, you can also explore our guide on how to apply for the NMFB Amazon Loan specifically designed for women entrepreneurs.
