The finance company segment of Nigeria’s financial services industry is expected to play a more prominent role in the country’s credit ecosystem over the next five years, particularly as financing gaps persist between commercial banks and microfinance institutions.
The Chief Executive Officer of Crystal Finance Company Limited, Imoudu Mamudu, made the assertion in an interview with Saturday PUNCH, noting that technology adoption, retail funding expansion, and stronger regulatory oversight will shape the sector’s future trajectory.
Mamudu spoke as Crystal Finance marked its 10th anniversary, reflecting on the company’s evolution and broader industry trends.
According to him, speed and convenience have remained the company’s core value proposition since its inception, even though its business model has evolved over time.
“What defines us is our ability to deliver services with speed and convenience. If you cannot give it to people with speed, then you are doing nothing at all,” he said.
He explained that the company initially focused on small and medium-sized enterprises and high-net-worth individuals but has gradually expanded its client base to include retail customers as market dynamics evolved.
Technology has also significantly changed how the firm delivers its services.
“When we started, everything was done through the physical office. Today, technology has made it possible for people to access services digitally. Many clients no longer need to come to the office,” he said.
Mamudu described the COVID-19 pandemic as one of the most defining moments in the company’s history.
At the time, Crystal Finance was about four years old and still building market confidence. The lockdown forced the company to migrate its core banking infrastructure to the cloud within a week to ensure business continuity.
The move enabled staff to operate remotely and maintain seamless service delivery, which helped strengthen client trust and even increased funding inflows during the uncertain period.
“We feared a flight to safety, but what we noticed was increased funding because clients saw that we continued to pay interest without delay,” he said.
Mamudu noted that the macroeconomic environment in recent years has significantly influenced the company’s strategy, particularly the sharp rise in interest rates.
Since 2023, Nigeria’s benchmark monetary policy rate has risen sharply as the Central Bank of Nigeria sought to curb inflation.
He said the increase in interest rates has affected the company’s cost of funds and forced adjustments in its funding strategy.
Previously, the firm relied heavily on long-term deposits from high-net-worth individuals and institutional investors, but the volatility in interest rates has shifted the focus toward shorter-term deposits and retail funding sources.
Mamudu added that foreign exchange volatility has also affected funding flows, as some investors liquidate naira-denominated investments to purchase foreign currency.
Despite these challenges, he said the company has maintained strong client loyalty, with a retention rate of more than 95 per cent over the past decade.
For Mamudu, this metric is a stronger indicator of business performance than headline financial figures.
“When clients stay with you over time, it shows they are satisfied with your service and that your revenue base can remain stable,” he said.
He identified human resource challenges as one of the biggest issues facing operators in the finance company sub-sector.
According to him, firms invest heavily in training skilled staff to manage credit risk and regulatory compliance, but many employees leave after gaining experience for higher-paying roles in larger institutions.
At the industry level, Mamudu believes finance companies are uniquely positioned to bridge the financing gap between commercial banks and microfinance institutions.
“Microfinance banks typically serve the lower end, commercial banks focus on the high end, and the middle segment remains underserved. Finance companies can fill that gap,” he said.
He added that small and medium-sized enterprises remain a key growth area for the sector, particularly as financial inclusion initiatives expand.
Looking ahead, Mamudu said Crystal Finance plans to prioritise three strategic areas over the next five years: technology-driven lending models, digital service delivery for younger clients, and stronger cybersecurity frameworks.
The company is also exploring blockchain-based solutions and peer-to-peer lending models that could enable direct interaction between lenders and borrowers.
“If a secure platform exists, people who want to provide funds can interact directly with borrowers and potentially earn higher returns, while borrowers access cheaper funds,” he said.
He also stressed the importance of strengthening cybersecurity infrastructure as financial services firms face increasing threats from sophisticated digital attacks.
“With artificial intelligence and evolving cyber threats, institutions must adopt a zero-trust security model and continuously strengthen their defences,” Mamudu said.
Despite current macroeconomic challenges, he expressed optimism that improvements in inflation and interest rate trends could support stronger economic conditions in the coming years.
For investors, however, he warned that yields on money market instruments may decline if inflation moderates and policy rates begin to fall.
“In the short term, investors may consider locking in higher yields while rates remain elevated,” he said.
