Jaiz Bank Plc is preparing to introduce a new suite of collateral-free financing products for small and medium-sized enterprises (SMEs) and retail customers, a move that could widen access to credit for thousands of underserved businesses across Nigeria if approved by the Central Bank of Nigeria (CBN).
The lender said the proposed products have already been developed internally and are currently awaiting final regulatory clearance before rollout. According to Managing Director and Chief Executive Officer, Haruna Musa, the initiative is designed to address one of the most persistent barriers facing Nigerian entrepreneurs: the requirement to pledge physical assets as collateral before obtaining financing.
Under the proposed framework, credit decisions would be based primarily on customers’ cash-flow patterns and repayment capacity rather than traditional collateral requirements. The bank also plans to leverage the Global Standing Instruction (GSI) system, a banking industry framework that allows lenders to recover overdue obligations from accounts held by borrowers across participating financial institutions.
Management said the lending process would be largely digital, enabling customers to apply, receive assessments, and potentially access financing remotely through mobile devices. The approach reflects a broader shift within Nigeria’s banking sector toward technology-driven lending models that rely on data analytics and transaction histories to evaluate creditworthiness.
For SMEs, which account for a substantial share of employment and economic activity in Nigeria, limited access to affordable financing remains a major constraint on growth. Many small businesses struggle to meet conventional collateral requirements despite demonstrating healthy cash flows and viable business models. As a result, alternative lending structures that prioritize business performance over asset ownership have gained increasing attention among policymakers and financial institutions.
Jaiz Bank’s proposal also aligns with ongoing efforts to deepen financial inclusion and expand credit access to underserved segments of the economy. Analysts note that digital lending platforms and cash-flow-based underwriting can help broaden access to finance while reducing operational costs for lenders. However, effective risk management remains critical, particularly in an environment characterized by elevated borrowing costs and economic uncertainty.
The bank moved to clarify reports suggesting that the initiative had been suspended, emphasizing that the project remains active and is simply awaiting regulatory approval. Management reiterated that no launch date has been fixed and that implementation timelines will be communicated once the CBN grants the necessary authorization.
If approved, the product could represent a significant development in Nigeria’s SME financing landscape, offering businesses an alternative source of funding at a time when access to credit remains a key challenge for economic growth, job creation, and private-sector expansion.
