NCGC-backed lending reaches N46.95bn in first year, Tinubu says

KEY POINTS

• National Credit Guarantee Company-backed lending reached N46.95 billion in its first year, supported by N21.59 billion in guarantees.

• 67,512 borrowers across 25 states and the FCT accessed the credit, including 11,374 women and more than 22,000 first-time formal borrowers.

• The scheme operates through 19 financial institutions and is intended to widen formal credit access for households and businesses.

MAIN STORY

President Bola Tinubu says the National Credit Guarantee Company (NCGC) helped participating financial institutions extend N46.95 billion in loans during its first year of operations, as the Federal Government seeks to expand access to formal credit for individuals and businesses.

Tinubu disclosed this on Monday in a series of posts on his official X handle, @officialABAT, stating that the company had issued N21.59 billion in guarantees to participating lenders.

The President said the arrangement meant that every N1 in guarantee cover had helped unlock about N2.17 in credit, with the government-backed risk sharing giving financial institutions greater confidence to lend to borrowers who might otherwise struggle to secure financing.

The NCGC currently works with 19 financial institutions, comprising 13 commercial banks, three microfinance banks and three development finance institutions.

Tinubu said the scheme was established to address a major barrier to formal financing, particularly for viable businesses whose access to loans can be limited by inadequate collateral or a lack of established credit histories.

Under the guarantee arrangement, NCGC absorbs part of the lending risk while participating financial institutions provide the credit, allowing lenders to extend financing to a wider range of borrowers.

The scheme has reached 67,512 borrowers across 25 states and the Federal Capital Territory, with women accounting for 11,374 of the beneficiaries.

Tinubu said 33.5 per cent of those who benefited were first-time formal borrowers. This means more than 22,000 Nigerians entered the formal credit system through the scheme and can begin building credit histories through their repayments.

He said the ability to establish such records could improve borrowers’ prospects of obtaining further credit, as successful repayment creates a track record for future lending decisions.

The President linked access to credit to business activity and employment, noting that financing could allow traders to replenish their stocks, manufacturers to take on larger orders and businesses to expand their operations.

According to Tinubu, NCGC estimates that businesses supported through the scheme account for 661,291 direct and indirect jobs.

He said the credit guarantee programme formed part of a broader government effort to move Nigeria towards a credit-based economy, alongside other financing initiatives.

These include consumer credit provided through the Nigerian Consumer Credit Corporation (CREDICORP), student financing through the Nigerian Education Loan Fund (NELFUND), and business lending by the Bank of Industry and Development Bank of Nigeria.

Tinubu said the government would continue to widen access to credit so that more households and businesses could use formal financing to take advantage of opportunities created by its economic reforms.

THE ISSUES

1. The NCGC model shifts part of the lending risk away from financial institutions, potentially allowing viable borrowers who lack substantial collateral or established credit records to enter the formal credit market.
2. The number of first-time borrowers is significant because access to formal credit can create a repayment history that may influence future borrowing opportunities.
3. The reported lending figures also show the scale at which government-backed guarantees can be used to mobilise financing through existing financial institutions rather than having government directly provide every loan.

WHAT’S BEING SAID

“When I sought your mandate, I promised to move Nigeria towards a credit-based economy and to establish a loan guarantee scheme that would help small businesses overcome the barriers that keep them from finance.” — Bola Tinubu, President.

“NCGC has issued ₦21.59 billion in guarantees. On the strength of those guarantees, participating lenders have extended ₦46.95 billion in loans. That means every ₦1 in guarantees has helped unlock about ₦2.17 in credit.” — Bola Tinubu, President.

“Each successful repayment strengthens that record and can make the next loan easier to secure.” — Bola Tinubu, President.

“Our reforms laid the foundation. Credit gives Nigerians the means to build on it.” — Bola Tinubu, President.

WHAT’S NEXT

The Federal Government says it will continue expanding access to formal credit, with the NCGC operating alongside other government-backed financing programmes for consumers, students and businesses.

The continued participation of banks, microfinance banks and development finance institutions will determine how widely the guarantee mechanism can extend credit to additional borrowers.

BOTTOM LINE

The NCGC’s first year has produced N46.95 billion in credit for 67,512 borrowers, according to Tinubu, with the guarantee model aimed at reducing the collateral and credit-history barriers that keep many Nigerians and businesses outside formal financing.