Credicorp: Nigerians to access up to N2 million in interest-free consumer credit

The federal government has unveiled plans to offer Nigerians interest-free consumer credit of up to N2 million under a new Credicorp-backed initiative, the Managing Director of the Consumer Credit Corporation of Nigeria (Credicorp), Uzoma Nwagba, announced on Tuesday.

Speaking to journalists after a meeting with President Bola Tinubu at the Presidential Villa in Abuja, Mr Nwagba said the initiative aims to ease the financial burden on Nigerians by providing an affordable way to purchase essential goods and services, such as school fees, rent, devices and household appliances.

He clarified that Credicorp will not lend directly to individuals, but will support financial institutions that provide credit. The agency will offer a “backstop” to banks, fintechs, cooperatives and other lenders to make consumer credit more accessible, especially to workers and informal traders.

“The idea is that rather than you paying out of pocket to buy a N2 million car or laptop, you can now pay N100,000 monthly for 20 months — and that is what we mean by consumer credit,” Mr Nwagba said. “Credicorp provides the backstop, working with fintechs, cooperatives and banks. We don’t lend to people directly, but we make the system work.”

He said Credicorp, which was established by an Executive Order in April, is working to grow consumer credit into a major part of Nigeria’s financial system.

“It’s a big deal,” he said. “We want to build an ecosystem where every Nigerian, particularly workers and productive people, can get credit and pay later with dignity.”

“Today, when I tell people I’m the MD of Credicorp, they say, ‘Oh, you give loans to MSMEs, right?’ No. This is for consumers. This is so that Nigerians can buy what they need and pay over time, like it works in other countries.”

Beyond access to credit, Mr Nwagba said the president is focused on long-term economic and social impact.

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According to him, the programme has three core objectives: to improve the quality of life for Nigerians, reduce incentives for corruption, and catalyse demand for locally made goods and services.

“He has always talked about consumer credit as a way for people to improve the quality of their lives,” he said. “The idea that you have to save money, cash and carry, to buy things you need is a very outdated idea.”

Civil servants

Mr Nwagba explained that while Nigerians are familiar with business loans, consumer credit remains underdeveloped. He said Credicorp’s mission is to change that, and to ensure citizens are not forced into exploitative lending arrangements.

“It’s not about giving people free money,” he added. “It’s about allowing them to plan their lives and finances better, whether it’s buying a car to get to work or paying school fees in instalments rather than all at once.”

PREMIUM TIMES reports that the scheme is expected to roll out in phases, starting with federal civil servants. Mr Nwagba disclosed that over 1.6 million expressions of interest were received following a nationwide call for applications in April.

President Tinubu, he said, has given full support to the rollout and is keen to see ordinary Nigerians benefit from structured, non-exploitative access to credit.

He noted that many Nigerians admire the lifestyles of relatives abroad, even when they earn similar incomes, because those countries offer access to affordable credit systems that allow for staggered repayment over time.

“President Tinubu is quite obsessed with this idea that we should not have to save over years and decades to have a decent life — or never have a decent life at all,” he said.

Mr Nwagba also linked the credit programme to anti-corruption efforts, particularly among public servants. He argued that while some corruption stems from greed, much of it is driven by financial pressure in the absence of affordable credit.

“By people having more access to consumer credit, the pressures on their current active income reduces,” he said.

How the scheme will work

On implementation, Mr Nwagba reiterated that Credicorp will not lend directly to individuals but serve as a wholesale financier and risk-sharer, enabling financial institutions to offer consumer loans.

He identified poor credit data as a major barrier to credit access. Many banks, he said, are unable to properly assess applicants due to fragmented or incomplete credit histories.

To address this, Credicorp is working with the Central Bank of Nigeria and credit bureaus to develop a centralised credit reporting infrastructure linked to individuals’ National Identification Numbers. This would ensure visibility of all borrowings and support accurate credit scoring.

Mr Nwagba stressed that the government alone cannot fund the scale of credit required, which he estimated at N180 trillion if 50 per cent of the population is to benefit.

“That is multiple times the budget of the government,” he said.

Instead, Credicorp will provide wholesale capital to microfinance institutions and banks at affordable rates, while also offering credit guarantees to reduce lender risk. A National Credit Guarantee Company has already been established in partnership with the Bank of Industry and other agencies.

Alongside financing and guarantees, Mr Nwagba said the agency would work to shift public perception about credit.

“There’s a stigma around credit — that it’s a bad thing,” he said. “Whereas in countries like the US, people borrow and improve their lives and grow their economy and pay the loans.”

With adequate infrastructure and financial education, he said, Nigerians can adopt a responsible credit culture that supports both individual wellbeing and national development.

Scaling local industry

As part of its mandate to catalyse local production, Credicorp is using consumer credit to stimulate demand for Nigerian-made goods. Through the SCALE programme, short for Securing Consumer Access to Local Enterprise, the agency is partnering with manufacturers to channel borrowers toward locally produced items.

In October 2024, Credicorp met with domestic vehicle producers under the Nigerian Automotive Design and Development Council. The outcome was an agreement to supply buyers with locally made vehicles and tricycles via consumer loans pegged at a single-digit interest rate of 9 per cent.

Mr Nwagba said this is significant in a credit environment where most personal loans attract between 35 and 40 per cent interest, if not higher. Under the new arrangement, borrowers can access locally manufactured tricycles, solar kits, and furniture more affordably.

The SCALE programme also encourages backward integration. Manufacturers, particularly in the solar sector, are being urged to assemble components locally in exchange for increased access to credit-backed customers.

Three solar firms are already participating in this model, which links lower loan rates to a higher percentage of local content in the production process.

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“We tell them, the more you produce those photovoltaic cells locally, the lower the rates for customers, and the more customers we send your way,” Mr Nwagba said.

He added that Credicorp’s partnership with TVS, Nigeria’s largest tricycle manufacturer, is already yielding results.

“They make about 1,100 units a day. We’ve partnered with them through Accum Microfinance Bank to finance those vehicles directly to riders,” he said.

Previously, most riders had to rely on informal and often exploitative hire-purchase arrangements. With consumer credit, many may now be able to get their vehicles outright and repay in instalments.