ABUJA, Aug 24 – NICA has called on the Nigeria government to inject N2 trillion ($1.48 billion) into the National Credit Guarantee Company (NCGC) to expand access to affordable credit for businesses and productive sectors of the economy.
The National Institute of Credit Administration (NICA) made the call as it warned that the recent recapitalisation of Nigerian banks may not translate into stronger economic growth unless more credit reaches sectors such as manufacturing, agriculture, housing and education.
NICA Registrar and Chief Executive Officer, Prof. Chris Onalo, said private sector credit stood at 28% of Gross Domestic Product as of June 2026, well below the 60% to 80% average recorded in emerging economies. He also said lending rates of between 32% and 35% had made formal credit difficult to access, while banks remained cautious about lending despite improved liquidity following the recapitalisation exercise.
According to Onalo, weaknesses in Nigeria’s credit infrastructure, limited credit bureau coverage, poor collateral enforcement and slow judicial recovery processes have increased lending risks for banks.
He warned that the growing credit gap was pushing millions of Nigerians towards informal lenders and digital loan platforms, which could increase household debt and weaken the financial position of small businesses.
Onalo described the situation as a “credit paradox”, where funds are available within the banking system but are not moving sufficiently into the productive economy. He said a stronger NCGC could help reduce lending risks, unlock bank funds and increase credit to micro, small and medium-sized enterprises (MSMEs).
Beyond the NCGC, NICA proposed single-digit intervention funds for agriculture, manufacturing, housing and the creative economy. It also called for an Office of the National Chief Credit Officer to coordinate federal credit policies, intervention funds and guarantee programmes.
The institute recommended mandatory credit reporting by fintech companies, cooperatives and other lenders, as well as the full digitisation of the National Collateral Registry.
It also urged stronger regulation of digital lenders and reforms that would allow pension and insurance funds to invest more in corporate bonds and infrastructure debt. NICA further proposed that all 36 states establish Credit Access Departments to support grassroots businesses.
The NCGC was established in May 2025 with an initial capital of N100 billion to reduce lending risks and expand financing for MSMEs, manufacturers, consumers and larger businesses. The company recently partnered with the Nigerian Consumer Credit Corporation (CREDICORP) to provide partial credit guarantees aimed at expanding consumer lending through participating financial institutions.
