President Bola Ahmed Tinubu has announced that the National Credit Guarantee Company (NCGC) has issued ₦21.59 billion in loan guarantees, enabling participating financial institutions to extend ₦46.95 billion in credit to businesses and borrowers. This development represents progress in the Federal Government's drive to expand access to credit and move the country towards a credit-based economy. According to the President, every ₦1 in guarantees issued by NCGC has helped unlock about ₦2.17 in credit.
The NCGC was established to address the difficulty viable businesses often face in accessing finance because of inadequate collateral or limited credit history. The company shares part of the lending risk with participating financial institutions, giving them greater confidence to lend to businesses and borrowers who might otherwise be denied credit. This has enabled more businesses and individuals to access credit, promoting economic growth and development.
The President disclosed that NCGC currently works with 19 financial institutions, comprising 13 commercial banks, three microfinance banks, and three development finance institutions. This broad range of partnerships has helped increase access to credit for businesses and borrowers across the country. The President's statement was posted on his official X handle, highlighting the progress made by the NCGC.
According to the President, 67,512 borrowers across 25 states and the Federal Capital Territory had so far received credit backed by NCGC. Of the beneficiaries, 11,374 are women, while 33.5 per cent are first-time formal borrowers. This indicates that the NCGC's guarantees have had a significant impact on increasing access to credit for individuals and businesses, particularly women and first-time borrowers.
The President also noted that more than 22,000 Nigerians had entered the formal credit system for the first time, giving them an opportunity to build credit records through successful repayments. This is a significant achievement, as it enables individuals to establish a credit history, making it easier for them to access credit in the future. The NCGC's guarantees have helped promote financial inclusion and access to credit.
The President cited other government-backed financing initiatives, including the Consumer Credit Corporation (CREDICORP), the Nigerian Education Loan Fund (NELFUND), the Bank of Industry, and the Development Bank of Nigeria. These initiatives are part of efforts to build institutions that would make credit more accessible to Nigerians and businesses. The President emphasized that the various initiatives are aimed at widening access to credit.
The President emphasized that access to credit could enable traders to restock, while manufacturers could use financing to acquire machinery and fulfil larger orders. He noted that the NCGC estimated that businesses supported through its guarantees accounted for 661,291 direct and indirect jobs. The President concluded that the Federal Government would continue to widen access to credit so that the opportunities created by its reforms could reach households and businesses across the country.
Key points
- President Tinubu says NCGC's loan guarantees have enabled ₦46.95bn in credit to businesses and borrowers.
- NCGC works with 19 financial institutions to provide credit guarantees.
- Over 22,000 Nigerians have entered the formal credit system for the first time.
