‘Why Credit Reforms Could Transform Nigeria’s Financial Inclusion Drive’

Nigeria’s long-standing challenge of financial exclusion may be easing as recent credit reforms begin to lay the foundation for a more inclusive, consumption-driven economy, experts said.
They noted that the introduction of structured consumer credit and credit guarantees was expanding access to finance for households and small businesses previously locked out of the formal system.
However, they cautioned that the success of the reforms would depend on sustained funding, policy consistency and stronger public awareness.
Without adequate capitalisation and broad-based enlightenment on how the credit framework works, they warned that the reforms might fall short of delivering the scale of economic inclusion and growth envisioned.
Prof. Chris Onalo, Registrar and Chief Executive Officer of the National Institute of Credit Administration (NICA) has always advocated the adoption of credit as a national economic culture, often against policy resistance and short-term economic thinking.
He said on Sunday in Lagos that his message was largely ignored for years as debates focused on immediate gains rather than building durable financial structures.
“Nigeria is not very friendly to new ideas. People prefer personal progress to collective progress, and that widens inequality,” Onalo said.
According to him, a turning point came when President Bola Tinubu publicly committed to using credit as a national economic instrument to expand opportunity and curb corruption.
“That was when I felt the tide turning,” he said.
Onalo noted that despite years of strong profits in the banking sector, millions of Nigerians remained excluded from credit, unable to start businesses, buy homes or acquire productive assets.
He described the situation as banks “sitting on gold mines but refusing to lend,” a practice he said suppressed consumption, slowed growth and limited social mobility.
He said the establishment of the Nigerian Consumer Credit Corporation (NCCC) and the National Credit Guarantee Company (NCGC) marked the first practical steps toward dismantling entrenched barriers to credit.
“These are the pillars of a modern, credit-driven economy,” Onalo said.
Under the consumer credit framework, workers can now acquire household items and productive assets and repay over time, a development Onalo said would stimulate demand, expand production and create jobs.
However, he cautioned that the reforms would fall short without stronger capital backing.
“With about N100 billion, the impact will be marginal. For Nigeria, that is a drop of water.
“Government must raise it to at least one trillion naira to drive industrial growth,” he said.
An economist and chief consultant at B. Adedipe Associates Ltd., Prof. Biodun Adedipe, said the reforms were already delivering results, including a reduction in borrowing costs by about one-third compared with commercial bank loans.
Adedipe added that the framework supports local manufacturing by prioritising goods with high local content while complementary policies such as tax relief and the student loan scheme were strengthening household finances.
“These reforms are interconnected. Credit expands access, tax relief boosts purchasing power, and student loans free up household income,” he said.
Also speaking, Mrs Adeola Fadoro, Managing Director of Twinsmeekleen Ventures, identified low public awareness as a major constraint.
She urged the National Orientation Agency to intensify public education on the credit economy and the roles of the NCCC and NCGC.