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The short answer
Distributor credit is a private agreement, so there is no official standard; terms vary by distributor and by your record with them. Before buying on credit, agree in writing the payment period, credit limit, any security such as post-dated cheques, early-payment discount, late-payment interest, and how returns and near-expiry stock are handled. Check that the distributor's premises are registered with PCN.
Credit from a distributor is often the cheapest working capital a pharmacy can get, and also the easiest to lose. Miss a few payments and the distributor stops supplying just when you need stock. Good terms, agreed in writing, protect both sides.
No standard terms: what varies
We found no regulator-set norms for credit between pharmaceutical distributors and pharmacies in Nigeria. Terms are commercial and depend on the distributor, the product and your history. The structures below are common patterns; the figures are labelled examples.
| Term | What it means | Example |
|---|---|---|
| Payment period | Days from invoice to payment | 7, 14 or 30 days |
| Credit limit | Most you can owe at one time | ₦2,000,000 |
| Security | Post-dated cheques, a guarantor or a deposit | Two post-dated cheques |
| Early-payment discount | Lower price if paid quickly | 2% if paid within 7 days |
| Late-payment charge | Interest or fee on overdue amounts, if agreed | Stated in the agreement |
| Minimum order | Smallest order delivered on credit | A set naira value |
Returns, expiry and price changes
These clauses matter more than the payment period, because expiry losses can wipe out a month's margin.
- Minimum shelf life on delivery: agree that stock arrives with a minimum remaining shelf life, and that short-dated stock can be refused.
- Near-expiry returns or swaps: will the distributor take back or exchange items approaching expiry, and how close to expiry?
- Damaged or wrong items: how quickly you must report them, and whether a credit note follows.
- Recalls: who bears the cost of recalled batches.
- Price changes: whether a price rise applies to orders already placed.
Record batch and expiry on every delivery so you can prove when stock arrived. See bookkeeping for a pharmacy for the purchase register.
Is the early-payment discount worth taking?
Worked example (labelled example)
A distributor offers 2% off for payment within 7 days, otherwise the full amount in 30 days. Taking the discount means paying 23 days earlier to save 2%. Per naira paid, you save ₦2 on every ₦98 paid early: 2 ÷ 98 = 2.04% for 23 days. Over a year that is about 2.04% × (365 ÷ 23) = about 32%. If you have spare cash earning less than that, or can borrow for less, taking the discount usually makes sense. If paying early would leave you short for other stock, it may not.
What to check before you sign
- Confirm the distributor's premises are registered: PCN's website has a public premises check.
- Read the whole agreement, especially returns, expiry and late-payment clauses.
- Ask for statements monthly and reconcile them against your supplier ledger.
- Match your credit period to how fast the stock sells. Slow movers on 7-day terms will drain cash.
- Agree what happens to post-dated cheques once invoices are paid; ask for them back.
Managing several distributors
Most pharmacies buy from three or more distributors. Credit from each one is useful, but together they can add up to more than the shop can repay in a slow month.
- Keep one supplier ledger per distributor and a single summary of everything owed, by due date.
- Before placing an order on credit, check the total owed across all suppliers, not only the one you are ordering from.
- Pay on the due date even when the distributor does not chase; your payment record is what earns longer terms and a higher limit.
- Do not pay one distributor's overdue invoice by delaying another's. That only moves the problem.
Reading a supplier statement
When a monthly statement arrives, tick each invoice against your purchases register and each payment against your bank record. Check that credit notes for returns appear. Query differences in writing within the period your agreement allows. Unexplained balances that are left for months are the usual start of a dispute.
If a dispute arises
Most disputes are about short deliveries, returns that were never credited, or interest the pharmacy did not expect. Keep signed delivery notes, credit notes and statements. On interest, the Court of Appeal held in Coast Oil Ltd v Tuboscope Vetco (2019), as LawPavilion reports, that pre-judgment interest is not automatic and must be specifically claimed and proven; a written interest clause therefore matters to both sides. This is information, not legal advice.
Where Pryme fits
Distributor credit is between you and your supplier. On the customer side, a pharmacy with a Pryme Business Account can join Spaces, where customers can spend Loans on Spaces, lent by Solid Allianze MFB, with merchants in Spaces. See also pay-later for pharmacies and cash flow for small businesses.
Questions people ask
How many days credit do pharma distributors give in Nigeria?
There is no standard. Terms are agreed with each distributor and depend on your history; 7, 14 and 30 days are common patterns.
Can I return expired drugs to the distributor?
Only if your agreement allows it. Agree near-expiry returns or swaps, and a minimum shelf life on delivery, before buying.
Should I take an early-payment discount?
Work out the annual cost. A 2% discount for paying 23 days early is worth about 32% a year, which beats most other uses of spare cash.
How do I check a pharma distributor is licensed?
Use the premises check on the Pharmacists Council of Nigeria website.
Sources
- Pharmacists Council of Nigeria: verify pharmacist and premises · accessed Oct 2026
- Pre-judgment interest is not automatic: Coast Oil v Tuboscope (LawPavilion) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.