Tinubu Administration to Launch National Credit Guarantee Company by Mid-Year
The Federal Government of Nigeria has unveiled plans to establish a National Credit Guarantee Company (NCGC) as part of its efforts to deepen access to credit and stimulate economic growth. President Bola Tinubu announced the initiative during his New Year address on Wednesday, emphasizing its transformative potential for individuals and critical sectors of the economy.
“In this new year, my administration will further consolidate and increase access to credit for individuals and critical sectors of the economy to boost national economic output,” Tinubu stated.
The NCGC, expected to commence operations by the end of the second quarter, is a collaborative effort involving key public and private sector players, including the Bank of Industry, Nigerian Consumer Credit Corporation, Nigerian Sovereign Investment Agency, and the Ministry of Finance Incorporated. The initiative also includes multilateral institutions.
Expanding Credit Access to Underserved Groups
According to Tinubu, the company will focus on expanding risk-sharing instruments for financial institutions and enterprises, with particular attention to underserved groups such as women and youth. “This initiative will strengthen the confidence of the financial system, expand credit access, and support underserved groups… It will drive growth, re-industrialisation, and better living standards for our people,” he noted.
The announcement builds on the administration’s earlier efforts to democratise consumer credit. In 2024, the government launched the Nigerian Consumer Credit Corporation, initially targeting federal civil servants before extending services to the general public.
Credit Demand Declines Amid Debt Repayments
The plan for the NCGC comes amid a noticeable decline in consumer appetite for loans, as revealed by the Central Bank of Nigeria’s latest economic report. October 2024 marked the third consecutive month of reduced loan demand, with consumer credit outstanding falling 17.64% month-on-month to ₦3.50 trillion.
The drop is attributed to a focus on loan repayments, which saw personal and retail loans decline to ₦2.41 trillion and ₦1.09 trillion, respectively. Despite the contraction, personal loans remained dominant, constituting 68.95% of total consumer credit.
Sectoral Credit Allocation
The Central Bank’s report also highlighted shifts in sectoral credit utilisation, which moderated by 5.13% to ₦58.37 trillion in October. The services sector accounted for 52.57% of credit allocation, maintaining its lead over industry and agriculture, which received 43.31% and 4.12%, respectively.
A Blueprint for Financial Inclusivity
The NCGC initiative underscores the Tinubu administration’s commitment to fostering financial inclusion and economic resilience. By expanding access to credit and addressing barriers faced by underserved demographics, the programme aims to catalyse re-industrialisation, stimulate economic growth, and improve living standards across Nigeria.
Observers await further details on the rollout of the NCGC, which is poised to become a cornerstone of the country’s financial reform agenda.
