One of the ways of identifying a healthy and robust economy is seeing how small businesses operate within it. It goes without saying that small businesses play a vital role not only in generating value for the economy through the goods and services they provide, but also as a means of generating employment.
To that end, it is indeed a shame to learn that banks remain sceptical of lending to our cottage, micro, small, and medium enterprises (CMSMEs), citing the burden of default loans as a reason for their hesitation, as per experts speaking at a recent seminar.
However, the same experts readily agree that it is large companies who take loans but do not repay on time; it is the large borrowers taking undue advantages.
To that we ask: Why do banks continue to provide loans to these large companies while depriving our smaller businesses of the financing assistance that they readily deserve?
It is simply unacceptable that due to the sheer disregard displayed by certain nefarious parties, who are almost always empowered to do as they please as a result of connections and power, large sections of the economy continue to suffer.
Much of the blame must be placed on the banks themselves for their constant failure to reel in these bad actors; the size of our default loans continue to increase year by year, with little to no signs of showing a turn for the positive. If this is the reality, then why are banks hesitating to provide loans to our smaller businesses, of amounts that will be a fraction of what they provide to these larger corporations who continue to default with impunity.
Something needs to change, and it needs to change quickly. Ultimately, businesses require financial assistance to flourish, and we hope banks and financial institutions understand that they have a duty to support them, while simultaneously working to reduce the burden of bad loans that are crippling our economy.