Nigeria’s journey toward a robust credit economy is gaining momentum—and the time to accelerate is now. According to Ndidiamaka Ukaonu, FICA, Managing Director/CEO of Parthian Capital Limited, laying a solid foundation for credit access isn’t just about financial inclusion; it’s a key pillar for unlocking economic growth.
A Snapshot of Nigeria’s Credit Landscape
Despite our massive population and entrepreneurial energy, the credit penetration rate in Nigeria remains shallow, especially in the consumer market. For most citizens, borrowing capacity is tethered to their income; with a national minimum wage of ₦30,000 per month, millions find themselves trapped beneath the poverty line.
Compounding this challenge is our employment structure. With 80% of the economy informal, the lack of structured income systems makes it difficult for lenders to guarantee repayment, impeding growth in credit availability.
Yet, progress is visible. Thanks to digital innovations, formally employed individuals can now access loans from their smartphones—even on weekends. Financial institutions are also deploying smart algorithms to reduce fraud and expand credit options beyond traditional employment models.
Reforming for Recovery
Ukaonu acknowledges that economic reforms, including subsidy removal and currency liberalization have been tough but necessary. These disruptions are recalibrating Nigeria’s financial structure, and early signs (like the strengthening of the naira) suggest a course correction.
Disagreements on methods abound, but one thing is clear: reform is essential if we are to achieve sustainable growth.
Credit Types That Could Reshape the Nation
Ukaonu champions two game-changing consumer credit models:
- Payday Loans – Gaining traction across fintech platforms and banking institutions, these short-term facilities are plugging urgent financial gaps. With continued refinement, they could be a gateway to deeper financial inclusion.
- Mortgages – Critically underutilized, mortgages hold massive economic potential—not just for homeowners, but for SMEs too. Mortgage refinancing can unlock capital for small businesses, catalyzing entrepreneurship and job creation in a country where SMEs contribute nearly 48% of GDP and employ 80% of the workforce.
Transitioning to a Credit-Based Economy
To fully harness the power of credit, Ukaonu argues that strengthening credit registries is paramount. Currently focused largely on bank loans, credit registries must broaden their scope to include utilities, tenancy, retail, and employment behavior.
With tools like Bank Verification Numbers (BVN) protecting against fraud, individuals will be incentivized to protect their credit reputations. A reliable credit scoring system could revolutionize lending, hiring, consumer finance, and even reduce the pressure on Nigeria’s legal system.
She also credits NICA (National Institute of Credit Administration) and its CEO Prof Chris Onalo for their long-standing advocacy. Their work sets the stage for stronger credit governance and opens doors to socioeconomic transformation.
Looking Ahead
“If we get it right,” Ukaonu concludes, “credit will be the engine behind Nigeria’s ambitious goal of a $1 trillion economy.” From payday loans to mortgage systems, from registry strengthening to smarter reforms, there’s never been a better time to make credit work for the people.
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