NICA wants FG to inject N2 trillion into credit guarantee company

The National Institute of Credit Administration (NICA) has called on the Federal Government to immediately capitalise the National Credit Guarantee Company (NCGC) with N2 trillion to expand access to credit for businesses and productive sectors of the economy.

The Registrar and Chief Executive Officer of NICA, Prof. Chris Onalo, made the call in a statement on Sunday on the state of Nigeria’s credit economy.

Onalo said the recent recapitalisation of Nigerian banks would not automatically translate into economic growth unless deliberate measures were introduced to channel more credit into productive sectors.

He said private sector credit stood at 28% of Gross Domestic Product as of June 2026, significantly below the 60% to 80% average recorded in emerging economies.

What the NICA CEO is saying

According to Onalo, lending rates of between 32% and 35% have made formal credit inaccessible to key sectors of the economy, including manufacturing, agriculture, housing and education.

Onalo said banks had also become increasingly risk-averse despite improved liquidity following the recapitalisation exercise.

He attributed the reluctance to lend to weaknesses in Nigeria’s credit infrastructure, limited credit bureau coverage, weak collateral enforcement and slow judicial recovery processes.

The NICA chief executive warned that the widening credit gap was pushing millions of Nigerians towards informal lenders and digital loan platforms, a development he said could worsen household debt and weaken the capital base of small businesses.

He described the situation as a “credit paradox”, where funds were available within the banking system but were not circulating sufficiently within the productive economy.

• “Given the recent robust bank recapitalisation, the Federal Government should immediately capitalise the Nigerian Credit Guarantee Company (NCGC) with N2 Trillion.
• “This broad-based guarantee will de-risk lending, unlock bank balance sheets, and upscale credit to MSMEs nationwide. It is the bridge between strong banks and a strong economy,” he said.

Intervention funds for agriculture

Beyond the NCGC, Onalo called for single-digit intervention funds for agriculture, manufacturing, housing and the creative economy through relevant government institutions.

He also proposed the establishment of an Office of the National Chief Credit Officer to coordinate federal credit policies, intervention funds and guarantee programmes.

• Onalo recommended mandatory credit reporting by fintech companies, cooperatives and other lenders to strengthen Nigeria’s credit infrastructure and improve the visibility of borrowers.
• He also called for the full digitisation of the National Collateral Registry to reduce lending risks and make it easier for businesses to access financing.
• He urged the government to strengthen regulation of digital lenders to protect borrowers from predatory interest rates and unethical debt recovery practices.
• The NICA boss further proposed reforms that would allow pension and insurance funds to invest more in corporate bonds and infrastructure debt, potentially creating additional sources of long-term financing for businesses and infrastructure projects.

He also called on all 36 states to establish Credit Access Departments that would work with financial institutions and the NCGC to provide funding for grassroots enterprises.

Get up to speed

President Bola established the National Credit Guarantee Company Limited in May last year with aN100 billion initial capital.  and approved the appointment of its board and management team.

As part of the rollout, Tinubu appointed former Speaker of the House of Representatives, Rt. Hon. Yakubu Dogara, as Chairman of the NCGC Board, while Mr. Bonaventure Okhaimo will serve as the Managing Director and Chief Executive Officer.

According to the Presidency, the institution was designed to de-risk lending and expand access to finance for Micro, Small and Medium Enterprises (MSMEs), small corporates, manufacturers, consumers, and large businesses across Nigeria.

The company is expected to play a critical role in strengthening confidence in the financial system, supporting underbanked demographics such as women and youth, promoting industrialization, and generating employment opportunities.

What you should know

The NCGC recently signed an agreement with the Nigerian Consumer Credit Corporation (CREDICORP) to establish a risk-sharing partnership aimed at expanding access to consumer credit for Nigerians.

The agreement is designed to reduce lending risks for financial institutions by providing partial credit guarantees, while unlocking more wholesale funding for consumer lending through CREDICORP’s network of Participating Financial Institutions (PFIs).

Under the partnership, the NCGC will provide partial credit guarantee coverage for lending and advances made through CREDICORP’s Participating Financial Institutions.