NICA urges manufacturers to professionalise trade credit management
Trade credit
By Joy Oyerinde
Lagos, Sept. 1, 2026 (NAN) The National Institute of Credit Administration (NICA) has urged manufacturers to professionalise trade credit management to boost sales, protect cash flow and sustain production.
The institute also advised manufacturers to report distributor credit histories and related data to licensed credit bureaus and relevant business information agencies.
NICA made the call in a statement signed by its Registrar/Chief Executive Officer, Mr Chris Onalo, on Tuesday.
It said trade credit accounted for more than 60 per cent of working capital financing in Nigeria’s real sector, making its effective management critical to industrial growth.
According to NICA, while trade credit can help manufacturers move products faster, gain market share and keep factories operating, reckless lending could result in bad debts, cash-flow crises and factory closures.
The institute urged manufacturers to regard credit as a strategic sales accelerator rather than a concession, adding that properly structured credit policies would enable distributors to stock more, sell faster and remit payments promptly.
NICA further called for the adoption of professional, ethical and prudent credit management practices, including due diligence on distributors, appropriate credit limits, proper documentation of credit terms and regular monitoring of receivables.
It recommended the deployment of trained and, where possible, NICA-certified credit management professionals to strengthen discipline and integrity in credit decisions.
The institute also advised manufacturers to develop responsible trade credit policies that balance sales objectives with credit-risk management, saying both should complement rather than contradict each other.
NICA said sharing distributor credit information would help manufacturers identify risk patterns, reward distributors with good payment records through improved access to finance and reduce risks across the value chain.
It also encouraged manufacturers to explore credit factoring to strengthen liquidity, explaining that clean and verified receivables could be sold to a factor for immediate cash instead of waiting 30, 60 or 90 days for distributors to pay.
The institute said the funds could then be used to purchase raw materials and pay workers without disrupting factory operations.
NICA called on the organised private sector, particularly the Manufacturers Association of Nigeria (MAN), and manufacturers to embrace credit while ensuring that it was managed professionally.
It said its NICA CreditAcademy was available to train manufacturers’ teams and help integrate credit management systems. (NAN)www.nannews.ng
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