A credit expert and President of the Money Lenders Association (MLA), Gbemi Adelekan, has said that many Micro, Small, and Medium Enterprises (MSMEs) in Nigeria are building up negative credit profiles that could bar them from accessing the capital they desperately need to grow.
Adelekan, who stated this in an interview with the News Agency of Nigeria (NAN) on Sunday, described credit health as not just a financial record but as a business passport that can unlock doors or keep them firmly shut.
“It’s no longer just about borrowing money; it’s about what your credit story says about your business. Many MSMEs don’t realise that their borrowing behaviour today will determine whether they can scale tomorrow,” Adelekan said.
A disturbing trend
According to him, one alarming trend among digital money lenders in Nigeria is the revolving-door pattern where individuals, often already indebted, move from one loan app to another in search of quick funds.
This behaviour, he said, leaves a trail of unpaid debts and tarnishes the borrower’s credit reputation—something lenders are no longer ignoring.
“Most licensed lenders in the country now check your credit report with Central Bank of Nigeria (CBN)-approved bureaus before making a loan decision. And once you’re flagged for defaults, your chances of accessing future loans, especially with decent terms, drop significantly,” he explained.
- Adelekan, who is also the CEO of Trafalgar Associates, owners of Kwikpay Credit, revealed that out of over 1,000 loan applications his firm receives daily, around 40% are from individuals or businesses with poor credit histories.
- This statistic, he noted, is worrying and must be addressed if Nigeria’s MSME sector is to thrive.
“MSMEs often operate with tight cash flows and limited capital, so maintaining a good credit profile is not a luxury; it’s a necessity. Poor repayment behaviour limits your ability to raise funding, expand operations, or even negotiate favourable interest rates,” he said.
The role of technology
He explained that lenders ranging from traditional banks to fintech firms and cooperatives are increasingly leveraging technology and data to assess risk.
- According to him, Loan approvals today are based not just on collateral, but also on behaviour: past repayment history, number of active loans, default frequency, and now, even alternative data like employment status and income.
- To bridge the gap, Adelekan said Kwikpay Credit is rolling out a new loan product that links financial well-being to borrowing.
- The product will encourage customers to settle existing defaults with other lenders and offer additional support through financial literacy tools.
- Educational background and employment status will also be factored into loan eligibility to support better risk profiling.
