The National Institute of Credit Administration (NICA) has called for the immediate capitalisation of the Nigerian Credit Guarantee Company (NCGC) with two trillion naira.
The Registrar and Chief Executive Officer of NICA, Prof. Chris Onalo, made the call on Sunday in a statement on the state of Nigeria’s credit economy.
Onalo said stronger banks from the recent recapitalisation would not translate into economic growth without deliberate measures to expand credit to productive sectors.
He said private sector credit stood at 28 per cent of the Gross Domestic Product as of June 2026, far below the 60 per cent to 80 per cent average recorded in emerging economies.
According to him, high lending rates of between 32 per cent and 35 per cent have priced key sectors out of formal credit.
He listed manufacturing, agriculture, housing and education among sectors struggling to access affordable financing.
He said banks had become increasingly risk averse in spite of improved liquidity following the recapitalisation exercise.
He attributed the situation to weak credit infrastructure, limited credit bureau coverage, weak collateral enforcement and slow judicial recovery.
Onalo warned that the credit gap was pushing millions of Nigerians toward informal lenders and digital loan platforms.
He said this could worsen household debt and weaken the capital base of small businesses.
The NICA boss described the situation as a “credit paradox”, where funds existed within the banking system, but were not sufficiently circulating in the productive economy.
He said the government must, therefore, create mechanisms to de-risk lending and encourage banks to finance businesses capable of creating jobs and expanding production.
Onalo urged the Federal Government to empower the NCGC with two trillion naira to provide broad-based guarantees for lending to micro, small and medium enterprises.
He said the guarantee scheme would serve as a bridge between stronger banks and increased financing for businesses.
“Given the recent robust bank recapitalisation, the Federal Government should immediately capitalise the Nigerian Credit Guarantee Company (NCGC) with N2 Trillion.
“This broad-based guarantee will de-risk lending, unlock bank balance sheets, and upscale credit to MSMEs nationwide. It is the bridge between strong banks and a strong economy,” he said.
Onalo also called for single-digit intervention funds for agriculture, manufacturing, housing and the creative economy through relevant government institutions.
He advised the government to establish an Office of the National Chief Credit Officer to coordinate federal credit policies, intervention funds and guarantee programmes.
Onalo also recommended mandatory credit reporting by fintechs, cooperatives and other lenders to strengthen Nigeria’s credit infrastructure.
He called for the full digitisation of the National Collateral Registry to reduce lending risks and improve access to credit.
He insisted on regulation of digital lenders to protect borrowers from predatory interest rates and unethical debt recovery practices.
Onalo also proposed reforms allowing pension and insurance funds to invest more in corporate bonds and infrastructure debt.
He urged all 36 states to establish Credit Access Departments to work with financial institutions and the NCGC to fund grassroots enterprises.
“Bank recapitalisation has given us stronger banks. What Nigeria needs now is coordinated, guaranteed and disciplined credit,” he said.
He added that such measures would enable credit to become a catalyst for enterprise, employment and sustainable economic growth.
Onalo said NICA was ready to provide policy support, technical guidance and executive training for implementing the proposed reforms. (NAN)
