NCGC Unlocks N46.95bn Credit for 67,512 Borrowers in First Year

The National Credit Guarantee Company has facilitated N46.95 billion in loans to 67,512 borrowers during its first year of operations, as the Federal Government seeks to expand access to formal credit for businesses and individuals.

President Bola Tinubu disclosed the figures while marking the first anniversary of the credit-guarantee scheme.

According to the President, the NCGC provided N21.59 billion in guarantees, which helped participating financial institutions extend approximately N46.95 billion in credit.

This means that every N1 provided through the guarantee mechanism supported approximately N2.17 in lending.

The scheme currently operates through 19 financial institutions, comprising 13 commercial banks, three microfinance banks and three development-finance institutions.

The NCGC’s model is designed to address one of the major barriers facing borrowers in Nigeria: the inability to provide sufficient collateral or demonstrate a long enough formal credit history.

Under the guarantee structure, the NCGC takes on part of the lending risk, allowing participating financial institutions to extend credit to borrowers who might otherwise struggle to obtain financing.

Of the 67,512 borrowers reached by the programme, 11,374 were women, while 33.5% were first-time formal borrowers.

The latter figure represents more than 22,000 Nigerians entering the formal credit system for the first time, according to the President. 

The government said the creation of credit records for these borrowers could potentially make it easier for them to access additional financing in the future, provided they maintain good repayment records.

The scheme has so far reached beneficiaries across 25 states and the Federal Capital Territory.

Beyond the number of borrowers and loans disbursed, the government estimates that businesses supported through the programme account for approximately 661,291 direct and indirect jobs.

The figures highlight the government’s attempt to use credit guarantees as a mechanism for expanding lending without requiring the government itself to provide the entire value of the loans.

The NCGC programme is particularly relevant to small and medium-sized businesses, which frequently face difficulties accessing conventional bank financing because of collateral requirements, limited financial records and the perceived risk associated with smaller enterprises.

The credit programme is also being implemented against the backdrop of a still-high interest-rate environment.

Although the CBN reduced its Monetary Policy Rate by 350 basis points to 23% in September, lending rates faced by many businesses have yet to adjust fully to the new benchmark.

Recent market reports indicate that lending rates remain broadly between 20% and 46%, depending on the borrower and type of facility.

This means that expanding the availability of credit guarantees addresses the question of access to finance, while the cost of that finance remains a separate issue.

For the NCGC, the next phase will therefore involve not only increasing the number of beneficiaries but also sustaining repayment performance, expanding the participating financial institutions and determining whether borrowers who enter the formal credit system can subsequently obtain larger facilities without requiring the same level of guarantees.

The first-year figures nevertheless provide an early picture of how the credit-guarantee model is being deployed to connect Nigerian households and businesses with formal lenders.