Ethical Credit in Nigeria And Matters Arising – Yinka Dada
Access to credit is the lifeblood of any economy, and Nigeria is no exception. However, the Nigerian credit landscape presents a complex picture, where the need for financial inclusion clashes with concerns about ethical practices.
Though the percentage of adult Nigerians with formal financial services — including bank accounts, insurance and mobile money — rose to 64% in 2023 from 56% in 2020, according to EFInA, a UK government-backed firm working to deepen financial inclusion in the West African country, this is an improvement but there are gaps to cover.
On the positive side, the rise of digital lenders has plugged a gap left by traditional banks, offering quicker and more accessible loans, particularly for unbanked populations.
However, ethical concerns cloud this optimistic outlook. There have been accusations of predatory lending practices, with some lenders charging exorbitant interest rates and employing aggressive debt collection tactics
The path forward requires a multi-pronged approach. Regulatory bodies like the CBN need to continue strengthening oversight and consumer protection measures.
Lenders, both traditional and digital, must prioritize responsible lending practices and financial literacy initiatives for borrowers.
Ultimately, ethical credit in Nigeria hinges on striking a balance between financial inclusion and responsible lending. By working together, stakeholders can ensure that access to credit empowers Nigerians, fostering economic growth without compromising ethical principles.
Written by Yinka Dada (Advisor; Financial Inclusion)
