The President of the FinTech Association of Nigeria, Dr Stanley Jacob, has stated that the nation’s credit economy is making progress but remains at an early stage of development, rating credit adoption in the country at approximately “three out of five,” indicating steady growth alongside persistent challenges. Jacob made the assessment in an interview with the News Agency of Nigeria on Monday in Lagos, highlighting both the achievements of financial technology firms in expanding access to credit and the cultural and structural barriers that continue to limit widespread adoption.
According to Jacob, financial technology firms have played a key role in expanding access to credit, particularly among underserved populations. “Fintechs deserve credit for democratising access. Players such as Carbon, FairMoney, CredPal and CDCare have introduced Buy Now, Pay Later and micro-lending at scale,” he said. He explained that these platforms leverage mobile technology and alternative data for credit scoring, enabling them to reach consumers often excluded by traditional banking systems. This democratisation of credit represents a significant shift from the traditional model, where access to formal credit was largely limited to salaried workers with documented income histories and those with existing banking relationships.
From an economic perspective, the expansion of consumer credit has implications for household consumption, small business investment, and overall economic activity. When consumers can access credit for purchases such as appliances, electronics, or education, they can smooth consumption over time and make investments that improve their quality of life. For small businesses, access to working capital can mean the difference between surviving seasonal downturns and closing. The fintech led expansion of credit therefore contributes to economic resilience and growth, even if the absolute levels of credit penetration remain low compared to more developed markets.
Jacob noted that despite the progress, credit usage remains largely urban, youth driven, and transactional, driven more by necessity than widespread acceptance of credit as a financial tool. He attributed this to lingering mistrust shaped by past experiences with informal lenders, poorly structured loan products, and aggressive recovery practices. “The mistrust is not irrational. It stems from years of unclear pricing structures and difficult recovery practices that have influenced public perception,” he said. Jacob added that many Nigerians still view borrowing as a last resort rather than a means of financial growth, describing this mindset as a key barrier to wider adoption.
This cultural barrier is significant and not easily overcome by technology alone. In many societies, the transition from viewing debt as a sign of financial distress to viewing it as a tool for financial growth requires changes in financial literacy, consumer protection frameworks, and the demonstrated reliability of credit products. When consumers have positive experiences with transparently priced, fairly collected credit, trust builds over time. When they have negative experiences, mistrust deepens and spreads through social networks. The fintech industry’s ability to manage this trust equation will determine the pace of credit adoption.
Jacob commended recent Federal Government initiatives aimed at strengthening the credit ecosystem, describing programmes such as the Nigeria Credit Guarantee Company and the Nigerian Consumer Credit Corporation as positive steps toward improving access to credit. “CREDICORP holds promise as an enabler of consumer credit at scale, but effective implementation will be critical,” he said. The Nigerian Consumer Credit Corporation, in particular, has been designed to provide a framework for consumer credit expansion, including credit guarantees, consumer protection mechanisms, and credit reporting infrastructure. The success of these initiatives will depend on their execution, including the speed of disbursement, the accessibility of the programmes to target beneficiaries, and the transparency of their operations.
Jacob emphasised the need for sustained efforts to strengthen credit infrastructure, including improved credit reporting systems and increased public awareness. He recommended measures to build trust through transparent pricing, strong consumer protection, and incentives for responsible borrowing. “The culture will follow the infrastructure, but only if that infrastructure is seen as fair and accessible. While progress has been made, more work is needed,” he said. This observation captures the interplay between supply side and demand side factors in credit market development. Infrastructure including credit bureaus, collateral registries, and legal frameworks for loan enforcement is necessary but not sufficient. Consumers must also perceive that the system works for them, not just for lenders.
The fintech association president’s assessment provides a useful benchmark for policymakers and industry participants. A rating of “three out of five” suggests that Nigeria has moved beyond the earliest stages of credit market development but has not yet achieved the depth, breadth, and maturity of more advanced markets. The priorities going forward include expanding credit access to rural and informal sector populations, improving financial literacy around credit, strengthening consumer protection, and ensuring that credit products are designed with borrower welfare in mind. If these priorities are addressed effectively, Nigeria’s credit economy can continue its progression toward higher levels of adoption and impact.
