Amid Collateral Hurdles, NCGC Seeks Collaboration to Bridge MSMEs’ 80% Credit Gap

Nume Ekeghe

The National Credit Guarantee Company (NCGC) has called for more collaboration by stakeholders in Nigeria’s financial ecosystem to close the country’s widening credit gap for Micro Small and Medium Enterprises (MSMEs), which is estimated to have excluded 80 percent of MSMEs from formal lending channels.

Managing Director of NCGC, Mr. Bonaventure Okhaimo, made the call in Lagos yesterday during the company’s inaugural Stakeholders’ Engagement Forum themed, “Unlocking Access to Finance Through Credit Guarantees and Strategic Partnership.” The forum brought together bank CEOs, development finance institutions (DFIs), microfinance banks, fintechs, and policy leaders to explore ways to improve credit access to MSMEs.

According to him, “Nigeria’s macroeconomic outlook reflects a steady trajectory toward inclusive and sustainable growth, driven by gradual reforms and sectoral diversification.Recent data from the National Bureau of Statistics (NBS) shows a commendable Gross Domestic Product (GDP) growth of 3.13 per cent in Q1 2025 after rebasing, a significant improvement from the previous quarters.

This growth was supported by strong performance in the services and non-oil sectors, indicating the economy’s growing resilience amid inflationary pressures, rising interest rates, volatile exchange rates, and elevated energy costs that have significantly eroded the purchasing power of consumers and increased operating expenses for MSMEs and local manufacturers.”

He further stated: “The funding gap for Nigerian MSMEs is staggering, as an estimated 80 per cent of MSMEs lack access to formal credit due to unavailability of collateral requirements, high-risk perception from lenders, and the inflationary pressure leading to high borrowing costs that have historically stifled MSMEs growth.”

Delivering the keynote address, Chief Consultant at B. Adedipe Associates Limited, Dr. Biodun Adedipe, backed the emergence of NCGC as a long-overdue response to Nigeria’s credit market challenges.

He said: “Back in Nigeria, about 20 years ago, I was part of a team working on the Financial System Strategy (FSS 2020). We examined how to deepen the credit market to support Nigeria’s economic growth. Our analysis showed that properly calibrated credit policies could grow Nigeria’s economy by as much as $963 billion and position it among the world’s top 20 economies by 2020.

“Today’s event reminds me of that aspiration. It represents a renewed effort to reimagine credit’s role in Nigeria’s industrial development. In evaluating credit market strength, we often measure the ratio of private sector credit to GDP. Sadly, Nigeria’s performance in this regard remains poor. Among the top 10 African economies, Nigeria ranks at the bottom in terms of private sector credit to GDP.”