According to Uzoma Nwagba, the Chief Executive Officer of CREDICORP, Nigeria needs around N180 trillion circulating within its financial system to unlock a credit economy that mirrors the success of South Africa’s.
In a recent interview on Arise TV, Nwagba highlighted the challenges stifling Nigeria’s credit ecosystem. These include inadequate infrastructure, a lack of trust in the system, and poor credit visibility for most Nigerians.
“To build a consumer credit system similar to what exists in South Africa, where about 50% of the population can walk into a store and purchase a car or laptop on credit, we need approximately N180 trillion circulating in the financial system,” Nwagba explained.
The Role of Government
While Nwagba acknowledged that the federal government cannot and should not directly fund consumer credit to this scale, he stressed that the government must play a catalytic role. This includes removing systemic barriers that hinder financial institutions from providing more credit.
A significant barrier, he noted, is the absence of comprehensive and reliable credit profiles, coupled with the underperformance of Nigeria’s credit bureaus.
“Currently, only about 10% of Nigerians have their data in a credit bureau, and even that data is often incomplete,” he pointed out. “Without full access to a customer’s credit history, financial institutions struggle to build trust, making it difficult for even middle-class Nigerians to secure loans for things like cars or electronics.”
CREDICORP’s Strategy
Improving Nigeria’s credit infrastructure is a priority for CREDICORP, although Nwagba acknowledged that the process will take time. Instead of directly funding consumer loans, CREDICORP’s strategy is to help financial institutions lend more confidently and at lower costs.
“We don’t have the funds to meet Nigeria’s credit needs,” Nwagba admitted, revealing that CREDICORP’s budget was just N100 billion last year and will remain about the same in 2025—far less than the amount needed. However, through strategic partnerships, CREDICORP has been able to expand its reach and offer significantly lower rates than traditional lenders.
For instance, loans that would typically come with 30% interest might now be offered at 10-15% thanks to CREDICORP’s intervention.
“Our goal is to crowd out loan sharks by empowering banks and microfinance institutions to offer better alternatives,” Nwagba added.
Changing Mindsets Around Credit
Beyond infrastructure and capital, Nwagba emphasized the importance of cultural reorientation in shifting public perception of credit. He pointed out that there is a deeply ingrained belief in some parts of Nigerian society that credit is inherently bad, even though credit is a tool that powers successful economies worldwide, including those of the United States and United Kingdom.
Nwagba used the example of Aliko Dangote, whose massive refinery project was underpinned by credit, to illustrate how responsible use of credit can lead to significant economic growth.
“We already engage in informal credit—borrowing from friends or using loan apps—so why not formalize this with accountability and infrastructure?” he asked.
What You Should Know
On April 21, President Bola Tinubu officially launched the first phase of the Consumer Credit Scheme, which aims to offer credit facilities to working citizens across Nigeria. Initially targeting members of the civil service, the scheme is expected to eventually extend to the general public.
The government has emphasized that consumer credit is crucial for empowering individuals to improve their standard of living by enabling them to purchase goods and services upfront while managing payments responsibly over time. It also facilitates vital investments in areas like housing, transportation, education, and healthcare—sectors vital to national stability and personal aspirations.
To date, CREDICORP has already disbursed loans to approximately 36,000 beneficiaries, and the agency is now focused on scaling up the program nationwide.
