National Credit Guarantee Company Calls for Partnership to Boost Access to Credit in Nigeria

Strategic Insights -

The National Credit Guarantee Company (NCGC) has called on banks and other financial services stakeholders to collaborate in creating a more inclusive, resilient, and dynamic credit market in Nigeria. The Managing Director of NCGC, Mr Bonaventure Okhaimo, emphasized that such a partnership would help reshape Nigeria's credit landscape, allowing Micro, Small and Medium Enterprises (MSMEs) to thrive.

Key Takeaways:

  • The NCGC was established by the Federal Government with an initial capital of N100 billion to bridge the credit access gap and provide partial credit guarantees to reduce lenders' risks.
  • An estimated 80 per cent of MSMEs still lack access to formal credit due to collateral constraints and lenders' risk aversion, citing NBS data.
  • The formal financial inclusion in Nigeria rose from 54 per cent in 2020 to 64 per cent in 2023, but about 26 per cent of the adult population remains financially excluded.
  • The NCGC has partnered with DFIs such as BoI, DBN, NEXIM, and BOA, along with fintechs and government initiatives like Credicorp, which has enabled over 90,000 Nigerians to access structured consumer credit since April 2024.
  • The alarming decline in manufacturing exports, with a drop from N1.04 trillion in third quarter 2024 to N294 billion in first quarter 2025, attributed to prohibitive interest rates and difficult access to credit.
  • More than 40 per cent of manufacturers are unable to access the funds needed to operate at full capacity.
  • 767 manufacturers shut down in 2023, leading to over 18,000 job losses.
  • As of January, total outstanding credit stood at N4.12 trillion, just 15.5 per cent of total bank credit, and less than three per cent of GDP.
  • NCGC is established to provide partial credit guarantees rather than lending directly, aiming to cover a portion of potential loan defaults and reduce lenders' risks.

Statistics:

  • 80 per cent of MSMEs still lack access to formal credit due to collateral constraints and lenders' risk aversion.
  • 26 per cent of the adult population remains financially excluded in Nigeria.
  • N1.04 trillion: The manufacturing exports in third quarter 2024, the highest in recent years.
  • N294 billion: The manufacturing exports in first quarter 2025, the lowest in recent years.
  • 767: The number of manufacturers that shut down in 2023, leading to over 18,000 job losses.
  • N4.12 trillion: The total outstanding credit as of January, just 15.5 per cent of total bank credit, and less than three per cent of GDP.

Sources:

  • News Agency of Nigeria (NAN)
  • Bonaventure Okhaimo, Managing Director of NCGC
  • NBS data
  • Manufacturers Association of Nigeria (MAN)
  • Credicorp Ltd.
  • Central Bank of Nigeria
  • World Bank
  • B. Adedipe Associates Ltd.
  • National Institute of Credit Administration (NICA)