The National Institute of Credit Administration says Nigeria’s reclassification by FTSE Russell and Moody’s positive outlook could strengthen capital inflows and deepen access to credit for businesses.Chris Onalo, NICA’s registrar and chief executive officer, said this on Monday in Lagos.

Moody’s Ratings on Friday revised Nigeria’s sovereign outlook from stable to positive while affirming its B3 rating.

The agency cited stronger economic growth, improved foreign exchange reserves and a more resilient external position, despite persistent fiscal and debt affordability challenges.

FTSE Russell’s reclassification of Nigeria to Frontier Market status on Thursday, repositions Nigerian equities in its global indices.

The move is expected to improve Nigeria’s market visibility and potentially attract more foreign portfolio investment.

Mr Onalo said the developments were structural positives for Nigeria’s credit economy, provided stronger credit infrastructure and consistent economic policies support them.

He said increased foreign investment could strengthen banks’ capital and deposit bases, enabling them to expand lending to the real sector.

Mr Onalo added that greater market visibility could attract private equity, venture capital and credit funds, creating alternative financing channels for small and medium enterprises.

According to him, improved investor scrutiny would also encourage SMEs to adopt better financial reporting, credit management and professional practices.He said this would make more businesses “credit visible” and bankable.

Mr Onalo said increased foreign exchange inflows could support exchange rate stability, reduce imported input costs, and improve manufacturers’ cash flows and debt-servicing capacity.

On Moody’s decision to retain Nigeria’s B3 rating while revising its outlook to positive, Mr Onalo described it as a confidence signal rather than an immediate reduction in borrowing costs.

He said improved sovereign risk perception could gradually lower Nigeria’s borrowing costs.

This, he added, could encourage international banks and development finance institutions to extend credit lines and trade finance to Nigerian banks.Mr Onalo, however, said any meaningful reduction in household lending rates would depend on sustained moderation in inflation and lower default risks.

To maximise the benefits, he urged the federal government and regulators to strengthen credit reporting, operationalise the National Collateral Registry and professionalise credit administration.

Mr Onalo also called for stronger debt recovery mechanisms and expanded credit guarantee schemes for manufacturing, agriculture and housing.

He further advocated deeper development of the corporate bond market to provide businesses with alternative sources of long-term financing.

He urged the government to sustain exchange rate reforms, control inflation and reduce domestic borrowing to create more space for private sector credit.”FTSE and Moody’s have opened the door.

But the destination is a deep, inclusive and professional credit market,” Mr Onalo said.

He added that NICA was ready to work with the Central Bank of Nigeria, the Ministry of Finance, the Securities and Exchange Commission and the organised private sector to build a stronger credit economy.

(NAN)