NICA Urges FG To Inject ₦2trn Into Credit Guarantee Company

• NICA says a ₦2 trillion capital injection into the National Credit Guarantee Company could help unlock bank lending to MSMEs and productive sectors.

• The institute says high lending rates of 32–35 percent and weak credit infrastructure are restricting access to formal financing.

• NICA also wants cheaper intervention funds, stronger credit reporting and greater private-sector participation in long-term financing.

August 24, () — The National Institute of Credit Administration (NICA) has urged the Federal Government to inject ₦2 trillion into the National Credit Guarantee Company (NCGC) to expand access to credit for businesses and productive sectors of the economy.

The Registrar and Chief Executive Officer of NICA, Prof. Chris Onalo, made the call in a statement on Nigeria’s credit economy, arguing that the recent recapitalisation of banks would not automatically translate into stronger economic growth unless measures were introduced to encourage lending.

According to Onalo, private-sector credit stood at about 28 percent of Gross Domestic Product as of June 2026, significantly below the 60 to 80 percent range he said was common among emerging economies.

He also said lending rates of between 32 and 35 percent had made formal credit increasingly inaccessible to businesses in manufacturing, agriculture, housing and education.

NICA identifies ‘Credit Paradox’

Onalo described the situation as a “credit paradox”, where banks have stronger balance sheets and improved liquidity but remain reluctant to lend sufficiently to the productive economy.

He attributed the lending constraints to weaknesses in Nigeria’s credit infrastructure, including limited credit bureau coverage, weak collateral enforcement and slow judicial recovery processes.

“Given the recent robust bank recapitalisation, the Federal Government should immediately capitalise the Nigerian Credit Guarantee Company with ₦2 trillion”, Onalo stated.

He said a broad-based guarantee would reduce lending risks and encourage banks to deploy more of their balance sheets to businesses, particularly Micro, Small and Medium Enterprises.

“This broad-based guarantee will de-risk lending, unlock bank balance sheets, and upscale credit to MSMEs nationwide. It is the bridge between strong banks and a strong economy”, he added.

NICA seeks cheaper intervention funding

Beyond the proposed ₦2 trillion NCGC capitalisation, NICA called for single-digit intervention funds for agriculture, manufacturing, housing and the creative economy.

Onalo also proposed an Office of the National Chief Credit Officer to coordinate federal credit policies, intervention funds and guarantee programmes.

He recommended mandatory credit reporting by fintech companies, cooperatives and other lenders to strengthen Nigeria’s credit information system.

The NICA chief also called for full digitisation of the National Collateral Registry to reduce lending risks and make it easier for businesses to use assets as security for loans.

NCGC builds risk-sharing partnerships

President Bola Tinubu established the NCGC in May 2025 with an initial capital of ₦100 billion to reduce lending risks and expand access to finance for MSMEs, manufacturers, consumers and other businesses.

NICA’s proposal would significantly expand the company’s capital base, with the institute arguing that a larger guarantee capacity is needed to influence lending at the scale required by the economy.

The NCGC has already begun developing partnerships within the financial system. In July, it signed a risk-sharing agreement with the Nigerian Consumer Credit Corporation (CREDICORP) to expand consumer lending through participating financial institutions.

Under the arrangement, the NCGC provides partial credit guarantees on qualifying loans, reducing the risks faced by participating lenders.

Onalo also urged the 36 state governments to establish Credit Access Departments to work with financial institutions and the NCGC to improve financing for grassroots enterprises.

He further proposed greater participation by pension and insurance funds in corporate bonds and infrastructure debt to create additional sources of long-term financing for businesses and infrastructure projects.