Nigeria requires about N180 trillion circulating within its financial system to unlock a credit economy similar to that of South Africa, according to Uzoma Nwagba, the Chief Executive Officer of CREDICORP.

Speaking in a recent interview on Arise TV, Nwagba explained that Nigeria’s credit ecosystem remains underdeveloped due to factors like poor infrastructure, lack of trust, and limited credit visibility for many of its citizens.

“For us to have consumer credit that feels like it is in South Africa, where about 50% of the population can easily go somewhere and buy a car or get a laptop and pay over time, we need about N180 trillion circulating in the financial system, funding consumer credit,” Nwagba said.

While Nwagba acknowledged that the federal government cannot and should not directly fund such a large-scale credit system, he stressed that the government has an important role in removing systemic barriers that prevent financial institutions from taking the lead.

One of the major challenges, according to Nwagba, is the absence of comprehensive credit profiles, along with the underperformance of Nigeria’s credit bureaus.

“As of today, just about 10% of Nigerians have their data in a credit bureau, and even at that, the data is often incomplete,” he explained.

This lack of credit data, Nwagba pointed out, leads to mistrust among banks and microfinance institutions.

Without a complete understanding of a customer’s credit behavior, these institutions are reluctant to lend, making it difficult for even middle-class Nigerians to secure loans for things like cars or laptops.

“When banks or microfinance institutions can’t fully understand a customer’s credit behavior, they simply can’t trust them, and that’s why it’s hard for even middle-class Nigerians to walk into a bank and get a loan for something like a car or laptop,” he said.

Improving the country’s credit infrastructure is a top priority for CREDICORP, though Nwagba acknowledged that it will take time.

Rather than directly funding consumer loans, CREDICORP’s strategy is to enable financial institutions to lend more confidently and affordably.

However, Nwagba pointed out that CREDICORP does not have the resources to meet the vast credit needs of Nigerians.

The agency received N100 billion in its budget last year, with a similar amount allocated for 2025, which he noted is far below what is required to address the need for consumer credit in the country.

Despite these challenges, Nwagba highlighted that partnerships have enabled CREDICORP to expand its reach and offer loans at significantly cheaper rates compared to traditional lenders.

He explained, “Let’s say I went to my bank, and they would have given me a 30% interest rate, I could now get it for 10 to 15% because CREDICORP has helped crash the rates.”

He added that CREDICORP’s goal is to crowd out loan sharks by empowering banks and microfinance institutions to offer better alternatives to consumers.

In addition to infrastructure and capital, Nwagba identified cultural reorientation as a critical element of CREDICORP’s mission.

“There’s a deeply rooted belief in parts of our culture that credit is a bad thing.

But credit is simply a tool and it’s one that powers the very economies we admire,” he said, citing examples like the United States and the United Kingdom as countries where credit plays a crucial role in their economic growth.

Nwagba also referred to Aliko Dangote’s refinery project as an example of how large-scale credit can be used responsibly to drive prosperity.

“Many of us already engage in informal credit, borrowing from friends, family, or using loan apps, so why not formalize it with accountability and infrastructure?” he said.

Meanwhile, President Bola Tinubu launched the first phase of the Consumer Credit Scheme on April 21, a program aimed at providing credit facilities to working citizens in Nigeria.

Initially, the scheme will target civil service members, with plans to extend it to the general public.

The scheme is designed to offer Nigerians the opportunity to acquire goods and services upfront and responsibly manage payments over time, with a focus on investments in areas such as housing, transportation, education, and healthcare.

According to Nwagba, CREDICORP has already disbursed loans to about 36,000 beneficiaries and is now focused on scaling the program across the country to help accelerate financial inclusion and economic empowerment for Nigerians.