President Bola Tinubu has announced plans to establish the National Credit Guarantee Company by May 2025. This initiative is aimed at increasing access to credit for businesses and individuals in Nigeria by expanding risk-sharing mechanisms for financial institutions. The move is part of the government’s broader economic reforms to stimulate growth, promote entrepreneurship, and support small and medium enterprises (SMEs).
The new company will collaborate with government financial institutions such as the Bank of Industry and the Nigerian Sovereign Investment Authority. It will also partner with private sector organizations and multilateral agencies to provide guarantees that reduce the risk for lenders. This approach is expected to encourage banks and other financial institutions to lend more to sectors that traditionally face difficulties in accessing credit.
President Tinubu emphasized that the primary beneficiaries of the credit expansion would be women, youth, and underserved communities. The government aims to empower these groups by providing easier access to loans for business ventures and other financial needs. The initiative is seen as a critical step toward reducing poverty and fostering economic inclusion in Nigeria.
The plan to launch the National Credit Guarantee Company comes at a time when Nigeria’s economy is undergoing significant reforms, including the removal of fuel subsidies and foreign exchange liberalization. These measures are intended to create a more favorable business environment and attract foreign investment. However, ensuring credit accessibility for local businesses remains a top priority for the government.
Financial experts have welcomed the initiative, noting that it has the potential to significantly improve the Nigerian credit market. By reducing lenders’ exposure to risk, the program could lead to increased lending to SMEs and other critical sectors, which are essential for economic growth and job creation. The success of this initiative will depend on effective implementation and monitoring to ensure that the intended beneficiaries truly gain access to affordable credit.
