As high borrowing costs and persistent inflation continue to shape financing decisions across Nigeria, businesses and households are being urged to rethink debt, not as a financial burden to be avoided at all costs, but as a strategic tool for building wealth, expanding businesses and improving long-term productivity.
That is the central argument advanced by Gloria Onosode, director, enterprise sales, FairMoney Business, who says responsible, purpose-driven borrowing can accelerate business growth and help individuals achieve financial goals, provided loans are tied to productive investments and backed by disciplined repayment plans.
In an article titled “How Responsible Borrowing Can Help You Reach Your Financial Goals,” Onosode argues that Nigeria’s changing economic landscape requires a shift from viewing credit as a last resort to recognising it as an instrument for enterprise development and financial planning.
“For generations, conventional financial advice has treated debt like a trap — a final, desperate resort for emergency cash or a slippery slope toward financial instability. But as Nigeria’s economic terrain evolves, this defensive mindset is changing,” she wrote.
According to her, the distinction between good and bad debt lies not in borrowing itself but in how borrowed funds are deployed.
She explained that debt used to finance consumption, such as luxury purchases or discretionary spending, creates financial pressure without generating future income. By contrast, borrowing to acquire productive assets, finance inventory, expand operations or invest in professional skills can strengthen earning capacity and improve business resilience.
“Good debt acts as an investment in your future self or your company. It is capital deployed to acquire assets, increase productivity, or generate recurring revenue that far outpaces the cost of the interest,” Onosode said.
She noted that access to timely financing has become increasingly important for small and medium-sized enterprises (SMEs), many of which lose business opportunities because of temporary working-capital constraints.
According to the article, structured commercial financing enables businesses to fulfil large customer orders, purchase inventory ahead of peak demand or acquire productive equipment without waiting years to accumulate sufficient savings.
The article also argues that inflation has made delayed investment increasingly expensive, particularly for businesses seeking to purchase machinery, commercial vehicles, renewable energy systems or other productive assets whose prices often rise faster than savings can accumulate.
Onosode further identified investment in education, technical skills and workforce development as another productive use of credit, saying financing capacity-building initiatives can generate long-term gains through higher productivity and increased earnings.
However, she cautioned that responsible borrowing requires strong financial discipline and careful planning.
She outlined three guiding principles: borrow only for productive purposes, assess repayment capacity before taking on any debt, and ensure financing decisions are based on transparent pricing and realistic cash-flow projections.
“When you strip away the historical stigma surrounding credit, you find that borrowing is simply a neutral financial tool. In the hands of an undisciplined spender, it creates friction, but in the hands of a strategic planner, it can support business growth and financial planning when used responsibly,” she said.
Onosode stressed that borrowers must also recognise that every loan creates a legal repayment obligation and should therefore carefully evaluate affordability, understand all applicable charges and avoid borrowing beyond their financial capacity.
