Responsible borrowing can drive wealth creation -Onosode, FairMoney executive

Nigerians, especially entrepreneurs and small business owners, have been urged to see borrowing not as a sign of financial distress but as a strategic financial tool that can accelerate business growth and wealth creation when used responsibly.

The Director of Enterprise Sales at FairMoney Business, Gloria Onosode, said while debt has traditionally been viewed as something to avoid, changing economic realities require a more balanced approach to credit.

According to her, borrowing should not be driven by survival needs but should form part of a long-term financial strategy aimed at creating value and generating income.

She explained that the difference between good and bad debt lies in how borrowed funds are utilised.

“Borrowing to finance consumption or purchase items that depreciate without generating income only creates future financial pressure,” she said. “However, borrowing to acquire productive assets, expand a business, increase inventory, purchase equipment or invest in professional skills can create long-term financial value.”

Onosode noted that access to timely financing enables businesses to seize opportunities that might otherwise be lost because of temporary cash flow constraints.

She said many small and medium enterprises (SMEs) lose valuable contracts simply because they lack immediate working capital, adding that appropriate financing can help bridge such gaps and support business expansion.

She also pointed out that in an inflationary environment, delaying the purchase of critical business assets while saving up cash may become more expensive over time as prices continue to rise.

According to her, financing productive assets such as manufacturing equipment, commercial vehicles and solar power installations allows businesses to begin generating revenue immediately while gradually repaying the loan.

Beyond business expansion, Onosode described education and skills acquisition as worthwhile reasons for responsible borrowing, noting that investing in knowledge and professional development can significantly improve long-term earning potential.

She stressed that responsible borrowing requires financial discipline and should be guided by three key principles.

These, she said, include borrowing only for productive purposes, ensuring there is a clear repayment plan before taking a loan, and choosing lenders that offer transparent pricing without hidden charges.

She advised borrowers to conduct realistic cash flow assessments and fully understand their repayment obligations before accepting any credit facility.

According to her, credit should be viewed as a neutral financial instrument whose impact depends largely on how it is used.

“In the hands of a disciplined and strategic planner, borrowing can become a powerful tool for business growth and financial progress,” she said.

Onosode, however, cautioned that every loan comes with a legal obligation to repay, urging borrowers to carefully assess affordability, understand all applicable charges and avoid taking on debt beyond their repayment capacity.

She maintained that when used responsibly, purpose-driven credit can help individuals and businesses achieve sustainable financial goals while positioning themselves for long-term economic growth.