President Bola Ahmed Tinubu has said that over 400,000 Nigerians, including youth corps members would in July benefit from consumer credit being anchored by the Nigerian Consumer Credit Corporation (CREDICORP).
Tinubu gave this pledge in his maiden State of the Nation address he delivered before a joint session of the National Assembly to mark this year’s Democracy Day.
While the phrase – making haste, slowly – may seem apt to describe the Tinubu administration’s on-going bid to democratise access to consumer credit for Nigerians, equally unmistakable, and certainly praiseworthy, is its resolve to create a framework for its sustainability.
On January 1, President Bola Tinubu had in his New Year speech, promised to establish the National Credit Guarantee Company to expand risk-sharing instruments for financial institutions and enterprises. The initiative, he said, “will strengthen the confidence of the financial system, expand credit access, and support under-served groups such as women and youth. It will drive growth, re-industrialisation, and better living standards for our people”.
Only last week, this newspaper gave an update on the initiative: four Federal Government-owned institutions would come together to fund the proposed National Credit Guarantee Company (NCGC). They are the Ministry of Finance Incorporated (MOFI), Bank of Industry (BOI), Nigeria Sovereign Investment Authority (NSIA), and Nigerian Consumer Credit Corporation (CREDICORP).
Proposed to be a joint venture entity by the four institutions, private sector players and multilateral institutions, the company is expected to commence operations in the second quarter of next year.
The NCGC, at its coming, is expected to play the role of a guarantor of loans granted to borrowers, thereby reducing the risks of the lenders. It will also be expected to work with other credit guarantee schemes such as banks, insurance companies, and other relevant institutions. In all, it has as its overall goal, to enhance the quality and effectiveness of credit guarantees in the financial system.
Just as the idea of a consumer credit administration would seem unthinkable without the enabling structure of an institution to guarantee and share the risks, we cannot but laud the rather measured approach being adopted by the government since the take-off of CREDICORP a little less than a year ago. Rather than the institution biting more than it can chew, we consider it a measure of its institutional wisdom that the scheme actually started on a pilot, test-run basis, starting with federal civil service employees, whose data base are not only readily available but also largely adequate.
The bigger problem of course still lies ahead. Indeed, as critical as enabling infrastructure of credit guarantee is to its sustainability, the glaring inadequacies in our national identity management system have remained just as impregnable. For instance, it’s been 13 years since the National Identity Management Commission (NIMC), which claims exclusive authority for managing the national identity infrastructure, deployed the National Identity Number (NIN). Shortly after, that is in 2015, it set September 2015 as commencement date in which all transactions involving the identification of individuals must be done with the NIN. This was long after the banks, long-pressed for the enabling infrastructure of data for credit and ancillary matters, had evolved their own unique, fit-for-purpose Bank Verification Number (BVN).
Presently if there can be any talk of progress, it is, at best sub-par and painfully slow. In the first place, if Nigerians expected a seamless integration of the NIN and the BVN, this has proven difficult and challenging. Even the performance of the NIMC has been at best sub-par with a mere 110 million enrolees as at September, last year, in a country of more than 200 million people. Perhaps, the only thing that could be said to be worse is the situation in which the banks with their 38 million BVNs and the NIMC with its 110 million-odd enrolees have continued to operate in silos.
These factors, which appear to be the heart of the current situation in which the country continues to suffer the denial of the critical platform on the basis of which a single, harmonised and truly multi-purpose registry can truly be developed, needs to be addressed and urgently too. We expect the NIMC to step up to the plate as the country’s number one agency in identity management.
The Nigerian Consumer Credit Corporation (CREDICORP) has revealed that only three percent of Nigerian workers accessed formal consumer credit in the past year, exposing the significant gap in Nigeria’s credit system.
Speaking in Abuja during the World Consumer Rights Day, Uzoma Nwagba, CEO of CREDICORP, noted: “For consumer credit to make a real difference in the economy, it must reach 50 percent of the country’s GDP, amounting to N176 trillion. At present, the country falls short, with a credit gap of N141.3 trillion.”
He stated that the lack of consumer credit access is not due to insufficient funds but rather a breakdown of trust in the system. “Large sums already circulate within the financial sector and could be mobilized, yet millions remain unable to access credit due to systemic inefficiencies.”
Nwagba pointed out this challenge goes beyond policy and requires innovation. He explained that consumer credit must be made widely accessible through creative approaches, which in turn will attract the necessary regulations, infrastructure, and economic frameworks to sustain it.
According to him, consumer credit serves two important functions. First, it is a product that must be structured like any other financial service to reach those who are currently excluded. He noted that innovative solutions such as mobile nano-loans, instant credit approvals at purchase points, “buy now, pay later” options, and digitized savings group records could expand credit access. He also stated that specially designed loan products for women and youth would ensure broader financial inclusion.
Secondly, consumer credit plays a key role in unlocking access to essential goods and services. He explained that credit enables people to afford solar home systems, digital devices, vehicles, improved housing, and household furniture, which in turn supports job creation and economic growth. He noted that smartphone penetration in Nigeria is still below 30 percent, but increased access to credit would allow more people to acquire digital devices and participate in the modern economy.
To bridge the N141.3 trillion credit gap, Nwagba stated that CREDICORP is working to build a strong credit infrastructure that will make access to loans easier, safer, and more reliable.
He explained that this involves ensuring that all working Nigerians have a dependable credit score that facilitates access to financial opportunities. He added that the Central Bank of Nigeria’s (CBN) movable collateral registry and global standing instruction (GSI) should be made more accessible to ethical lenders, while alternative forms of collateral, including digital assets, agricultural output, and even legally quantifiable labor, should be explored.
He also spoke about CREDICORP’s role in providing wholesale lending and credit guarantees to financial institutions, allowing them to extend loans to a larger segment of the population. Beyond lending, he noted that a cultural shift is necessary to make consumer credit more widely understood and accepted as a tool for financial empowerment.
CREDICORP aims to ensure that at least 50 percent of all working Nigerians have access to consumer credit by 2030. The organization is already seeing progress, with more individuals and businesses benefiting from its initiatives.
Nwagba stated that CREDICORP is not just offering loans but creating a system that supports financial stability and economic opportunity. He added that partnerships with financial institutions, regulators, innovators, and international organizations will continue to play a role in achieving this vision.
He described the journey towards consumer credit expansion as long but essential, with the potential to reshape Nigeria’s financial landscape and drive sustainable economic growth.
Successful applicants for the Consumer Credit Loan will start getting the cash next week, Chief Executive Officer (CEO), Consumer Credit Corporation (CREDICORP) Uzoma Nwagba said yesterday.
According to him, N100 billion had been released for roll out to the beneficiaries.
The Federal Government introduced the scheme to remove structural, market and policy barriers and accelerate access to consumer credit by Nigerians.
It is a major campaign promise by President Bola Ahmed Tinubu, designed to give Nigerians access to credit to purchase household and other items of need without paying direct cash.
The target is to have 50 per cent of the working populace on the scheme’s net by 2030.
It was learnt that the first set of 500,000 beneficiaries would be civil servants.
According to Nwagba, “the funding has been received”, and the disbursement process is set to begin immediately.
“The bottom line is that this programme is about to start, and it will happen this week or latest on Monday, next week,” Nwagba told The Nation.
He further stated that the scheme’s implementation will be carried out through participating financial institutions (PFIs), which will manage the credit distribution rather than CREDICORP directly engaging with individual customers.
Nwagba said: “The first phase of this initiative will see 15,000 civil servants being credited in each round, continuing until the target of 500,000 civil servants are reached.
“After this initial phase, the scheme will be extended to include other eligible members of the public, broadening its impact on Nigeria’s economy.”
In a statement, the CREDICORP announced in Abuja that the disbursement of consumer credit to economically-active Nigerians had officially commenced through its network of PFIs.
Among the first wave of institutions involved is Credit Direct, Nigeria’s largest lender to civil servants and a subsidiary of the First City Monument Bank (FCMB) Group.
This partnership aims to accelerate access to consumer credit, particularly for civil servants nationwide.
Starting in early September, civil servants on the Integrated Payroll and Personnel Information System (IPPIS) will benefit from exclusive offers, including reduced interest rates and flexible repayment plans.
Nwagba expressed enthusiasm about the launch, noting that the initiative aligns with President Bola Tinubu’s commitment to improving the well-being of Nigerians.
He said: “We are excited to partner with Credit Direct to kick off President Tinubu’s consumer credit scheme with civil servants, as Mr. President had promised.”
The CRIDCORP boss added that through the partnership, civil servants could access instant and affordable credit, which will help them manage economic challenges and improve their quality of life.
The scheme’s design, which mirrors the model used by the Development Bank of Nigeria (DBN), involves providing wholesale capital or credit guarantees to PFIs ensuring a structured and efficient rollout of the programme.
The key feature of the credit offer includes some of the lowest interest rates in the market beginning from Tuesday.
Civil servants will have the opportunity to access loans of up to N3.5 million, depending on their income and needs.
Additionally, the scheme offers flexible repayment plans tailored to the unique circumstances of each borrower, alongside a quick and easy application process to facilitate fast access to funds.
The importance of consumer credit in modern economies cannot be overstated, as it enables citizens to make crucial purchases, such as homes, vehicles, education, and healthcare, while repaying responsibly over time.
Earlier in the year, President Tinubu endorsed the scheme, noting that consumer credit is vital for achieving social mobility and improving the standard of living for hardworking Nigerians.
HIGHLIGHTS
The Consumer Credit Scheme of the Federal Government will take off with a target of N180 trillion available as loans to the beneficiaries, the agency in charge said at the weekend.
The Consumer Credit Corporation (CreditCorp) plans a take-off with 500,000 beneficiaries by the end of next year.
Already, two million Nigerians have enrolled through the agency’s website.
No fewer than 80 million have been identified by the agency as qualified for the scheme.
This is part of key major campaign promises of President Bola Ahmed Tinubu, along with the student loan scheme, which is also due to begin in September.
Chief Executive Officer of CreditCorp, Uzoma Nwagba, told The Nation that the agency was on the last lap of planning for the take-off of the programme.
The goal is to make it possible for economically active Nigerians to have access to funding on credit for items that could make life comfortable for them, without having to pay upfront.
Nwagba said: “With consumer credit facility, if you have a modest income, you should be able to have access to a vehicle, solar panel, cell phone, laptop, education, house, and other things that improve the quality of your life, and you can pay for it over a prolonged period.”
The CreditCorp, established by the government, is to strengthen the country’s credit infrastructure and provide financial guarantees to institutions that have traditionally been hesitant to lend due to concerns about potential losses.
“The financial system, the people who already do lending today, are the ones who have the capital,” Nwagba said.
“Our first job is to strengthen the credit infrastructure of the country.”
A key aspect of this initiative is the implementation of a centralised credit scoring system, where every economically active Nigerian will have a credit score tied to their National Identification Number (NIN).
This, Nwagba believes, will prevent consumers from evading their credit obligations.
“It means that every Nigerian who is economically active will have a credit score written on their NIN so that you cannot run away from your credit behaviours,” he said.
The CreditCorp has identified approximately 80 million Nigerians as the target beneficiaries of this consumer credit initiative, with the Central Bank of Nigeria (CBN) playing a crucial role as a partner.
“The CBN is a strong partner in this journey with us as well as the credit registry and credit bureaus,” Nwagba said.
While the financial institutions will be responsible for disbursing the credits, CreditCorp’s role is to enable them to lend more by either providing capital in bulk or offering guarantees.
Nwagba expects that by the end of 2025, a conservative estimate of 500,000 Nigerians will have benefited from consumer credit access, with the ultimate goal of centralising all credit reporting to build confidence among financial institutions.
Regarding the interest rates, Nwagba said while the financial institutions will set the rates, CreditCorp will make it easier for them to lend at more concessionary rates by providing funds or guarantees.
“Beneficiaries of consumer credit will pay back with interest at a concessionary rate, which is usually determined by the financial institutions they work with,” he explained.
“Our goal is, by providing and making capital easier to the financial institutions, they can also charge them lower interest, and it will be concessionary.”
CreditCorp is currently in the process of setting up its operations, with an expression of interest already garnering over two million responses from individuals.
The initial focus will be on civil servants, but the initiative is ultimately intended to serve all economically active Nigerians.
“If a consumer fails to repay the credit, they will be ruining their credit score, and that is a consequence we are enforcing,” Nwagba warned.
“The borrower will suffer if they do not act right to their credit.”
This transformative consumer credit initiative holds the promise of unlocking unprecedented opportunities for millions of Nigerians, empowering them to access life-improving goods and services, and ultimately, enhancing their overall quality of life.
The Presidential Council on Industrial Revitalisation has established a Technical Working Group to develop the needed framework by enhancing consumer credit in Nigeria.
The Minister of Industry Trade and Investment, Dr. Doris Uzoka Anite, said an efficient consumer credit system is a highly essential component of a successful economy, as it works to improve market efficiency and fill in gaps in consumption and productivity by providing consumers immediate access to credit and allowing them to purchase ahead of ability.
The minister stated this at the inaugural meeting of the Technical Working Group for Consumer Finance in Abuja, noting that the absence of a well-structured consumer credit system has been a significant impediment to financial inclusion and economic prosperity.
He said: “The establishment of the Technical Working Group by the Presidential Council on Industrial Revitalization is timely and strategic, an initiative aimed, among other things, at proposing and implementing a viable institutional and regulatory framework that can significantly improve the consumer credit landscape.
“Nigeria has numerous financial institutions and credit schemes, but many Nigerians still face substantial hurdles in accessing credit due to stringent eligibility criteria, high-interest rates, identity-related challenges, fragmented data sources for proof of livelihood and financial worth, lack of awareness or understanding of credit processes, and inadequate credit available for lending.”
She said the Technical Working Group draws its members from the Central Bank of Nigeria (CBN) Federal Inland Revenue Service (FIRS) National Identity Management Commission (NIMC), the National Insurance Commission (NAICOM), the National Institute of Credit Administration (NICA), the Federal Competition & Consumer Protection Commission (FCCPC), the Bank of Industry (BOI) amongst others, and agreed on a five-month timeline to achieve its objectives.