Nigeria’s Credit Penetration Rises to 14%: A Decade of Progress by CRC Credit Bureau Limited

Credit penetration in Nigeria has climbed to 14%, largely driven by the efforts of CRC Credit Bureau Limited, the country’s leading credit bureau. This notable rise, however, still falls short of global expectations.

Dr Tunde Popoola, Group Managing Director and CEO of CRC Credit Bureau Limited, announced these figures during the company’s CRC Finance and Credit Conference 2024, held in Lagos on Wednesday. The event, which also marked the company’s 15th anniversary, was themed “Sustainable Financing Options: Innovations in Credit Risk Management”.

Popoola highlighted the significant strides made in the last 15 years, noting that 33 million Nigerians now have credit scores recorded in CRC’s database. However, he emphasized that more work is needed to extend credit access to a larger portion of the population. “In 2023 alone, 29.4 million credit searches were conducted, and over 10 million searches have been made in the first quarter of 2024. CRC has expanded from a single product in 2010 to offering 18 products, covering all lending value chains,” Popoola stated.

Despite the challenges, Popoola acknowledged the progress made by CRC and regulatory bodies like the Central Bank of Nigeria (CBN) in improving access to credit. “Today, millions of Nigerians can obtain loans through their phones, with lenders relying on CRC for credit information. The Credit Reporting Act of 2017 and support from the CBN have significantly boosted credit penetration over the years,” he remarked.

Reflecting on CRC’s journey, Popoola recounted the company’s inception 15 years ago when it received its licence from the CBN. “Our mission has always been to facilitate access to credit in Nigeria. While we started with credit reporting, we’ve since introduced numerous products, though uptake by some organisations and banks remains limited,” he added.

Joel Owoade, Chairman of CRC’s Board of Directors, spoke earlier at the event, addressing the economic challenges impacting corporate profitability in Nigeria. “Sustainable financing is crucial for economic stability. Effective risk management is essential to mitigate bad loans,” he advised.

Olaniyi Yusuf, Managing Partner of Verraki, discussed the implications of artificial intelligence on credit risk management. “The AI-driven fourth industrial revolution should focus on reducing global inequality rather than job displacement. More jobs are expected from AI innovations, but Nigeria needs the right regulatory framework to benefit fully. Regulations should encourage innovation rather than stifle it,” Yusuf explained.

The acting Director of the Banking Supervision Department at CBN, Dr Adetona Adedeji, highlighted the long journey ahead for Nigeria’s credit system. “At 14% penetration, we have much room for growth. Credit must be sustainable and continuously revolving to support the economy,” Adedeji stated. Represented by Assistant Director Olubunmi Ayodele-Oni, Adedeji outlined CBN’s measures to enhance sustainable credit, including the establishment of the National Collateral Registry and the Global Standing Instruction.

“A good credit score can lower borrowing costs. Lenders now have a comprehensive view of borrowers before transactions are finalized,” Adedeji concluded, underscoring the ongoing efforts to build a robust credit system in Nigeria.