The Chief Executive Officer of CREDICORP, Uzoma Nwagba, has said Nigeria needs approximately N180 trillion circulating within its financial system to unlock a credit economy comparable to that of South Africa.
Speaking during a recent interview on Arise TV, Nwagba emphasized that Nigeria’s credit ecosystem remains stunted, primarily due to poor infrastructure, lack of trust, and low credit visibility for the majority of its citizens.
“For us to have consumer credit that feels like it is in South Africa, where about 50% of the population can easily go somewhere and buy a car or get a laptop and pay over time, we need about N180 trillion circulating in the financial system, funding consumer credit,” Nwagba said.
Government’s role
While acknowledging that the federal government cannot and should not directly fund credit at such scale, lest it transforms into a “massive welfare socialist state“, Nwagba said the government has a catalytic role to play by removing systemic barriers that prevent financial institutions from taking the lead.
A major hurdle, according to Nwagba, is the lack of comprehensive credit profiles and the underperformance of Nigeria’s credit bureaus.
“As of today, just about 10% of Nigerians have their data in a credit bureau, and even at that, the data is often incomplete,” he noted.
“When banks or microfinance institutions can’t fully understand a customer’s credit behavior, they simply can’t trust them, and that’s why it’s hard for even middle-class Nigerians to walk into a bank and get a loan for something like a car or laptop,” he added.
CREDICORP’s strategy
He said improving Nigeria’s credit infrastructure is one of CREDICORP’s top priorities, though it will take time.
- According to him, rather than directly funding consumer loans, CREDICORP’s strategy is to enable financial institutions to lend more confidently and affordably.
- He pointed out that the agency does not have the money to meet the credit needs of Nigerians.
- He disclosed that the agency received N100 billion in its initial budget for last year, and got about the same amount allocated for 2025, which is far below what’s needed.
- Nwagba, however, noted that partnerships have made it possible for CREDICORP to expand reach and offer significantly cheaper rates than traditional lenders.
He added that CREDICORP is lowering interest rates through strategic partnerships and risk-sharing mechanisms.
“Let’s say I went to my bank, and they would have given me a 30% interest rate — I could now get it for 10 to 15% because CREDICORP has helped crash the rates,” Nwagba explained.
“Our goal is to crowd out loan sharks by empowering banks and microfinance institutions to offer better alternatives,” he added.
Changing mindsets around credit
Beyond infrastructure and capital, Nwagba identified a third pillar of CREDICORP’s mission: cultural reorientation.
“There’s a deeply rooted belief in parts of our culture that credit is a bad thing. But credit is simply a tool and it’s one that powers the very economies we admire,” he said, pointing to global examples like the United States and the United Kingdom.
He used the example of Aliko Dangote, whose refinery project is underpinned by large-scale credit, to make the case that credit responsibly used can be a path to prosperity.
“Many of us already engage in informal credit — borrowing from friends, family, or using loan apps — so why not formalize it with accountability and infrastructure?”
What you should know
President Bola Tinubu announced the launching of the first phase of the Consumer Credit Scheme on April 21, a programme designed to offer credit facilities to working citizens in the country.
- The government at the time said the first phase of the scheme would begin with civil service members before extending to the general public.
- It emphasized that consumer credit plays a pivotal role in modern economies, empowering individuals to elevate their standard of living by acquiring goods and services upfront and responsibly managing payments over time.
- The scheme facilitates vital investments like housing, transportation, education, and healthcare, crucial for sustaining stability and pursuing personal aspirations.
- According to Nwagba, CREDICORP has so far disbursed loans to about 36,000 beneficiaries and the agency is now focused on accelerating and scaling the program across the country.
