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Securing Cash-Backed Loans for Nigerian Businesses

In light of concerns raised by the National Institute of Credit Administration (NICA) last month about the potential harm of high-interest loans to small and medium businesses across Nigeria, NICA’s Chief Executive Officer, Prof Chris Onalo, advocated for easier access to loans with lower interest rates and flexible repayment terms.

“To be better competitors and be empowered to expand their trades, businesses should have access to single-digit interest rate loans with flexible repayment options. This is the ideal situation that will boost a business-friendly environment.” – Chris Onalo, NICA

Cash-backed loans are an important way for businesses to reduce risk while securing short-term needs. This credit facility encourages new and existing business owners to attempt to expand their businesses. 

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Secure Cash-Backed Loans with Earnipay

Understanding Cash-Backed Loans

Cash-backed loans, also termed collateralized loans, require borrowers to offer assets, typically cash reserves or equivalents, as security for a loan. Here are some advantages:

  • Boosting Borrowing Capacity:
    Businesses can access larger loan amounts by providing collateral, allowing them to pursue projects, seize opportunities, and meet short-term financial needs. Consequently, this expanded capacity contributes to their growth and success.
  • Reducing Risks for Lenders and Borrowers:
    Collateral in cash-backed loans reduces risks for lenders and borrowers. Lenders use it as a safety net against losses, enabling them to offer favorable loan terms.
  • Meeting Short-Term Financing Needs:
    In addition to increasing borrowing capacity and reducing risks, cash-backed loans are valuable for addressing short-term financial needs. Whether it’s bridging cash flow gaps, dealing with seasonal fluctuations, or seizing time-sensitive opportunities.
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Following the Central Bank of Nigeria’s recent hike in the monetary policy rate (MPR) by 400 basis points, reaching an unprecedented 22.75%, the landscape for borrowing and lending is undergoing a significant shift. With interest rates at historic highs, businesses face more challenges in accessing affordable financing. 

Cash-backed loans will allow borrowers to navigate the tightened lending conditions more effectively, securing the funding needed to sustain operations, pursue growth initiatives, and weather economic uncertainties. Amidst the CBN’s aggressive stance on monetary tightening, cash-backed loans allow businesses to maintain financial stability amid Nigeria’s volatile economic conditions.

At Earnipay, we’re dedicated to helping you achieve your business goals. Our loan facility is designed to provide you with the financial support you need, so that you can focus on what matters most, solving your needs. Apply for an Earnipay Business Loan today.

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