While national initiatives have expanded access to bank accounts and mobile payments, Nigeria faces an ongoing disparity between basic financial inclusion and access to formal credit. EFInA estimates that 87.2 million Nigerian adults are now formally included in the financial system. Despite this milestone, formal credit penetration remains limited across the adult population.
Disconnect Between Account Ownership and Credit Access Holding a bank account or utilizing digital wallets does not automatically translate into creditworthiness under traditional underwriting models. Out of the 87.2 million formally included adults, only about 12 million—representing roughly 10 per cent of the adult population—have secured formal credit facilities.
Underwriting Barriers: Traditional lenders demand verifiable income streams, established credit histories, and physical collateral, excluding millions of informal workers.
Contraction in Consumer Lending: Central Bank of Nigeria (CBN) data indicates that outstanding consumer credit dropped from ₦4.72 trillion ($3.5 billion) in 2024 to ₦3.78 trillion ($2.8 billion) in 2025, marking a 19.92 per cent decline.
Informal Demand: Research by Stears estimates that potential credit demand among informal borrowers transitioning into formal channels represents a $621 million market opportunity.
The Rise of Informal Borrowing Rails Faced with stringent bank requirements and elevated interest rates, many consumers and micro-enterprises rely on informal financial alternatives. Peer-to-peer loans, trade credit, cooperative societies, and local savings groups continue to meet short-term liquidity needs without demanding formal collateral.
To explore further technical analysis on credit underwriting, open banking frameworks, and digital lending infrastructure across Africa, visit AfroTech Horizon.
Unlocking Alternative Credit Scoring Bridging the gap between payment adoption and loan disbursement requires financial institutions to look beyond traditional collateral. Leveraging transaction data, cash flow histories, and open banking protocols will be essential for lenders seeking to underwrite credit safely for Nigeria's vast informal sector.
