Debt As A Catalyst For Financial Inclusion

Low income levels, weak savings culture, complex banking systems, and a persistent rural-urban divide are frequently cited as barriers to financial inclusion in Nigeria. However, one critical — and often overlooked — factor is debt.

While debt is commonly seen as a burden, it can also be a powerful catalyst for growth. Experts in finance explain that when properly structured and utilized, debt enables individuals to meet urgent needs and businesses to expand operations. In macroeconomic terms, debt increases consumption and investment, strengthens productivity, and improves livelihoods.

Yet, the challenge arises when these debts become delinquent, turning into non-performing loans (NPLs). It is estimated that nearly 45% of loans in Nigeria’s credit market end up in delinquency. In response, lenders often raise interest rates to compensate for losses, reducing credit accessibility and tightening liquidity. Meanwhile, borrowers who default sometimes disengage entirely from the financial system, opting instead for informal, high-risk lending alternatives.

Adija Uzodinma, Chief Operating Officer at Mida Technologies, believes that debt recovery can in fact support financial inclusion — but only if executed with care.

“The problem is that many recovery firms treat collections as a zero-sum game — recover the money at any cost, and move on,” she said. “That kind of scorched-earth model might work in the short term, but in the long term, it damages trust, discourages future borrowing, and ultimately shrinks the formal credit system,” Uzodinma said.

Mida Technologies, a technology startup providing data-driven collections and debt management solutions, takes a very different approach.

Oke Egbi, the company’s Chief Revenue Officer, described Mida’s approach:

“We adopt a technology-led, empathy-driven model. While we aim to recover non-performing loans, we also evaluate each borrower’s financial position. Our platform enables restructuring where needed, tracks behavioral signals, and ultimately helps borrowers return to the formal credit system — not exit it.”

To close, Mayowa Anibaba, Mida’s CEO and co-founder, highlighted the broader role of responsible debt recovery in nation-building.

“Debt isn’t inherently negative — it’s a tool. When used properly, it builds bridges: to education, to healthcare, to business growth,” he said. “At Mida, we’re not just solving for delinquency. We’re building systems that help lenders lend safely, and help borrowers bounce back. That’s how we scale access — and that’s how we drive true financial inclusion in Nigeria,” Anibaba said.