As the newly established Nigeria Consumer Credit Corporation (CREDICORP) moves towards disbursing consumer credit to Nigerians, an impressive 151 financial institutions have shown interest following the corporation’s recent Expression of Interest (EOI) campaign.
CREDICORP, a Federal Government initiative aimed at expanding consumer credit access to millions of Nigerians, received EOIs from a diverse array of financial institutions, including commercial banks, microfinance institutions, finance companies, fintechs, mortgage banks, and cooperatives. Of the 151 institutions, 85 are licensed by the Central Bank of Nigeria (CBN) and collectively serve over 1.5 million consumer credit customers.
The Managing Director and CEO of CREDICORP, Mr. Uzoma Nwagba, expressed his enthusiasm about the strong interest shown by financial institutions. “The EOI remains an ongoing process and is quite detailed. We are pleased by the depth of engagements from financial institutions – especially the leading institutions of each type. This speaks to the excitement of financial institutions to partner with CREDICORP to receive our development finance or targeted credit guarantees.”
Mr. Nwagba highlighted the strategic vision and immense benefits of targeted consumer credit under President Bola Tinubu’s Renewed Hope Agenda. “Together with our partners, we are poised to accelerate consumer credit access, ensuring that millions more Nigerians can access the financial resources and products they need to improve their lives, backed by their income.”
A recent report released by CREDICORP on the EOIs provides notable insights into consumer credit trends among CBN-licensed institutions. The participating institutions report an average interest rate of 37% per annum on their consumer credit portfolios. CREDICORP aims to design financial products with its partners to enable lower but sustainable rates. The institutions also report an average credit tenor of 26 months, indicating a growing appetite for lending over extended periods. Additionally, profitable institutions show an average non-performing loan (NPL) rate of 6% for consumer credit, while the average NPL across all other credit is 9%. Interestingly, commercial banks report higher NPLs on consumer credit than other types of credit, likely due to a broader range of capital deployment options.
These findings highlight the dynamic nature of Nigeria’s consumer credit market and underscore the need for continued innovation and support for its sustainable growth. CREDICORP is now reviewing submissions from Participating Financial Institutions (PFIs) according to its governance and eligibility criteria, with credit disbursements set to commence shortly.
The EOI for Financial Institutions remains open for submissions and can be accessed at the Corporation’s website, www.credicorp.ng.