An estimated 80% of Micro, Small, and Medium Enterprises (MSMEs) in Nigeria remain excluded from formal credit access due to stringent collateral requirements and lenders’ aversion to risk, according to data cited by the National Credit Guarantee Company (NCGC).
At the inaugural Stakeholders’ Engagement Forum held in Lagos on Monday, NCGC’s Managing Director, Mr. Bonaventure Okhaimo, urged financial institutions to unite in creating a more inclusive and resilient credit system that unlocks sustainable economic opportunities for Nigeria’s MSMEs.
“An estimated 80% of MSMEs still lack access to formal credit due to collateral constraints and lenders’ risk aversion,” Okhaimo said. “This is a gap we must close.”
Unlocking Access to Finance Through Credit Guarantees
Themed “Unlocking Access to Finance Through Credit Guarantees and Strategic Partnership,” the forum convened players from commercial banks, microfinance institutions, fintechs, and Development Finance Institutions (DFIs), reflecting the growing urgency to reform Nigeria’s credit architecture.
Okhaimo described the establishment of NCGC as a “bold step” by President Bola Tinubu’s administration to de-risk lending, promote financial inclusion, and catalyze private sector growth, particularly in the face of macroeconomic challenges.
Institutional Support and Economic Outlook
Founded by the Ministry of Finance Incorporated (MOFI) in partnership with the Bank of Industry (BoI), Credicorp Ltd., and the Nigeria Sovereign Investment Authority (NSIA), NCGC also received technical backing from the Central Bank of Nigeria and the World Bank.
Despite promising indicators like a 3.13% GDP growth in Q1 2025, Okhaimo acknowledged that high inflation, volatile exchange rates, and rising energy costs continue to undermine MSME and manufacturing access to capital.
“More than 40% of manufacturers are unable to access the funds needed to operate at full capacity,” Okhaimo warned, citing the shutdown of 767 manufacturing businesses and over 18,000 lost jobs in 2023.
The manufacturing export value has plummeted from N1.04 trillion in Q3 2024 to N294 billion in Q1 2025, a decline attributed to credit scarcity and prohibitive interest rates.
A Guarantor Model for Scaled Credit
With an initial capital of N100 billion, NCGC will not lend directly but will provide partial credit guarantees to encourage financial institutions to issue loans to viable but underserved borrowers.
“We are here to play the role of a guarantor, covering a portion of potential loan defaults. This reduces lenders’ risks and incentivises them to extend more credit,” Okhaimo said.
He stressed NCGC’s strategic focus on collaborating with Participating Financial Institutions (PFIs), leveraging data analytics to de-risk borrowers, and driving policies that enhance financial inclusion.
“Together, we can ensure that viable borrowers, from farmers to manufacturers, are met with opportunity, not exclusion,” he added.
Expert Perspectives on Nigeria’s Credit Landscape
In his keynote address, economist Dr. Biodun Adedipe, Founder of B. Adedipe Associates Ltd., described Nigeria’s credit ecosystem as historically underperforming. Between 2015 and 2020, the private sector credit-to-GDP ratio remained between 10% and 15%, far behind global peers.
He cited South Africa (109.05%), Morocco (66.01%), and Kenya (32.15%) as examples of stronger financial systems, while Nigeria lagged below the global average of 146.4%.
“The credit framework today is a far cry from what we envisioned two decades ago,” Adedipe remarked. “NCGC is a long-awaited institutional intervention.”
Prof. Chris Onalo, Registrar/CEO of the National Institute of Credit Administration (NICA), emphasized the importance of transparency in NCGC’s operations and urged stronger integration with Nigeria’s financial inclusion agenda.
“Credibility and transparency will build the confidence needed for NCGC to succeed,” he stated.
With the launch of NCGC and its commitment to inclusive finance, stakeholders say the forum marks a shift from policy dialogue to actionable reform aimed at transforming Nigeria’s credit landscape.
