NICA wants FG to inject N2 trillion into credit guarantee company

The National Institute of Credit Administration (NICA) has urged the Federal Government to inject N2 trillion into the National Credit Guarantee Company (NCGC) to boost credit access for businesses and key economic sectors, according to a statement released on Sunday. NICA's Registrar and CEO, Prof. Chris Onalo, argued that recapitalising Nigerian banks alone would not stimulate economic growth unless measures are taken to direct more credit to productive sectors.

He highlighted that private sector credit is currently at 28% of Gross Domestic Product, far below the 60-80% average in emerging economies. Onalo pointed out that high lending rates of 32-35% have made formal credit unaffordable for critical industries such as manufacturing, agriculture, housing, and education. He attributed banks' reluctance to lend to weaknesses in Nigeria's credit infrastructure, limited credit bureau coverage, weak collateral enforcement, and slow judicial recovery processes.

Onalo warned that the growing credit gap is forcing many Nigerians towards informal lenders and digital loan platforms, which could exacerbate household debt and weaken small businesses' capital base. He termed this as a "credit paradox," where funds exist in the banking system but are not sufficiently circulating within the productive economy.

Onalo suggested single-digit intervention funds for agriculture, manufacturing, housing, and the creative economy through relevant government bodies. Additionally, he proposed the establishment of an Office of the National Chief Credit Officer to oversee federal credit policies, intervention funds, and guarantee programmes. He also encouraged all 36 states to set up Credit Access Departments to collaborate with financial institutions and the NCGC in funding grassroots enterprises.

President Bola Tinubu established the NCGC in May 2025 with an initial capital of N100 billion and appointed its board and management team. The institution aims to mitigate lending risks, expand finance access for MSMEs, small corporates, manufacturers, consumers, and large businesses across Nigeria. The NCGC recently partnered with the Nigerian Consumer Credit Corporation (CREDICORP) to share risks and unlock more funding for consumer lending through CREDICORP's network of Participating Financial Institutions.