E-Financial
Revealed: Rosabon Study Shows Nigeria Loan Financing Over 5 Years
In the financial sector, there has been continued improvement in performance as the reforms carried out by the Central Bank of Nigeria (CBN) to evolve dynamic financial system continued to have positive effect on the sector, according to a study by Rosabon Financial Services.
The reasons for the growth in loan lending, according to the study, cannot be unconnected with the reforms that were taken by the CBN to save the financial sectors that witnessed an unprecedented decline resulting from the global financial crisis.
The bailout of some banks and the successful cleaning of banks’ balance sheets through the sale of non-performing loans to Asset Management Corporation of Nigeria (AMCON), have brought renewed confidence in the banking industry.
In 2011, AMCON acquired 1.7 trillion non-performing assets of some Nigerian Banks.
Furthermore, the CBN reviewed and replaced the universal banking model which was adopted in 2001 with a new model which makes banks to focus on core banking businesses.
Under the new model, banking licenses are categorized into commercial banking (regional, national or international); merchant (Investment) banking and specialized banking which could be microfinance (unit, state or national) mortgage (state or nation) or non-interest banking.
In 2011, 3 of the 8 banks that were bailed out with public money failed to show commitment towards recapitalization.
Their banking licenses were revoked and the Nigeria Deposit Insurance Commission (NDIC) formed three new banks to take over their assets and liabilities.
These three banks were Afribank, Platinum-Habib Bank and Spring Bank from which Main Street Bank Ltd, Keystone Bank Ltd and Enterprise Bank Ltd were formed respectively.
The remaining bailed banks were recapitalized through merger/acquisition agreement with Access Bank, EcoBank, FCMB and Sterling Bank respectively. This is evidenced in the performance indicators of banks which show that are better position to perform their functions:
Also, the financial deepening indicators show that credit facilities to the private sector has been on the increase since the 2009 bank reforms.
Small and Medium Enterprises (SMEs) function as an engine for development, innovation and prosperity in emerging economies like Nigeria.
Therefore, access to loan facilities by the SMEs is very crucial for the economic growth of any nation. Unfortunately, access to loan financing is highly constrained for them.
In 2014, commercial bank loans to the SMEs dropped at an exponential rate. An analysis of commercial banks’ credit to small-scale industries indicates a decline of about 7.5% in 2003 to 0.12% in 2014.
A number of reasons have been proffered for this financing gap. The banks attribute their risk aversion stance for not lending to MSMEs to demand-side constraints.
These include the lack of managerial capacity, inadequate collateral, and poor record-keeping, among others.
However, supply-side issues such as high transition costs and a lack of understanding by the banks of the nature and operations of the MSMEs also exist.
Other constraints plaguing the MSME sub-sector in Nigeria include infrastructure deficit, especially power and transport, policy inconsistencies, bureaucracy; multiple taxation and levies, insecurity, weak intellectual property protection and contract enforcement.
To address the huge financing gap mitigating against the MSMEs, the CBN established the Micro, Small and Medium Enterprises Development Fund (MSMEDF) on August 15, 2013 with a seed capital of N200billlion.
The broad objective of the Fund is to channel low interest funds to the MSME sub-sector of the Nigeria economy to:
.Enhance access by MSMEs to financial services
.Increase productivity and output of microenterprises
.Increase employment and create wealth
.Engender inclusive growth
Robust economic growth cannot be achieved without putting well focused programmes that increase access of poor and low income earners to factors of production, especially credit in place.
Microfinance is about providing financial services to the poor who are traditionally not served by the conventional financial institutions.
In Nigeria, a large percentage of the population is still excluded from financial services.
The 2010 EFInA study revealed a marginal increase of those served by formal financial market from 35.0% in 2005 to 36.3% in 2010, five (5) years after the launching of the microfinance policy.
It can be seen from the table above that the loan and advances profile of microfinance banks to the various sectors of the economy is growing.
The recapitalization of the microfinance banks in December, 2013 has further strengthened the lending capacity of the banks. The shareholders’ fund of the microfinance finance/community banks has increased from N227 million in 1992 to N53 billion in 2014.
The finance houses also play a prominent role in loan lending to the economy. The assets and liabilities of the finance houses have also increased. The Central Bank has set September 31, 2015 as the deadline for the recapitalization of finances to N100 million.
The net loans and advances of finance houses have increased from N16 billion in 2005 to N48 billion in 2014.
The finances houses have also been very active in the leasing sub-sector of the financial services business.
There is a great potential in the industry recognized by the 350 established companies presently engaged in a different forms of leasing.
Another interesting development is the attraction of the Nigerian Leasing to foreign investors in partnership with Nigerians.
The expansion of these activities is a reflection of the increasing awareness of lease consciousness in the country.
According to a study by Lafferty Cards and Consumer Finance, at the end of 2012 consumer loans in Nigeria stood at $7.29 billion, far lower than the $19.11 billion in Egypt and $293.29 billion in South Africa.
Currently, the CBN Monetary Policy Rate (MPR) in Nigeria is 13% which significantly higher than the average rate of 8.75% across other major emerging countries in Africa i.e. Kenya, Egypt and South Africa.
There is clearly a huge financial gap in terms of consumer lending in Nigeria. According to the same report, 93% of Nigerians could not access loans in 2012 and while about two-thirds of the population had access to informal money lenders, 71% of the loans granted were through family networks.
Despite about 42 million adults employed, Nigeria only had 8.2 million active borrowers, of whom only 1.6 million held loans from banks as at 2012.
However, there has been a recent rise in consumer confidence in the Nigerian banking system.
An EY 2014 global consumer banking survey found that 69% of Nigerian banking customers have confidence in their banks.
Unfortunately, the same cannot definitively be said about the borrowers by lenders, given that bad credit was one of the major factors that led to the 2009 “near collapse” of the Nigerian Banking sector.
Lenders are still very risk-averse regarding providing credit to individuals and businesses in the country.
Over the past five years, the MPR has steadily increased from 6% to 13%. This has translated to comparatively higher prime lending rates.
Prime lending rates are indicators of the interest rates offered by financial institutions to their most creditworthy customers e.g. large corporations that have a lower likelihood of defaulting.
For more risky customers, the rates offered by the lenders would be higher. The MPR rise has however, atypically had an inverse relationship with the prime lending rates which have declined.
The lending rates in Nigeria have decreased from 17.56% in 2010 to 15.95% as of April 2015. This decrease would be a major contributor to the 43.28% increase in credit from commercial banks to the private sector between 2010 and 2015.
Even with that decline, it is still more expensive to acquire credit facilities in Nigeria in comparison with other emerging African countries in 2015. This is illustrated in the graph below.
One of the major reasons for the limited access to credit facilities among consumers and households is the lack of robust identity verification systems and processes.
Aimed at tackling this issue, CBN has begun to roll out the Bank Verification number (BVN) mandate.
The BVN gives a unique identity that can be verified across the Nigerian Banking Industry i.e. not peculiar to one bank.
By the 31st of October 2015, all Nigerians with accounts in commercial banks would be expected to comply with this directive. This is a significant step in resolving the issue of identity as biometric information is acquired and linked to the account holder.
This helps create a less risky lending scenario as multiple account holders and the corresponding credit history can be linked.
For instance, if an account holder in one bank defaults on a loan, because the information is linked, such a person would not be able to take another loan from a second bank.
This directive would go a long way to encourage banks and other financial institutions to lend. It would ultimately act as a safety net by significantly limiting the reoccurring exposure to bad debt by the same defaulter.
The CBN has role to play in mandating banks to make loans more accessible to individuals, particularly the under-leveraged individuals and households with a focus in the consumer space.
Another way the loan lending can be increased in Nigeria is to issue a directive to financial institutions, requiring them to be enrolled with the Credit Bureaus.
Furthermore, the CBN should create a unified platform where all the lending institutions are able to share information of defaulting customers as this will create an atmosphere of transparency among the players in the financial industry.
Conclusively, although loan lending in Nigeria has increased in absolute terms over the years, there are still major steps that need to be taken in order to unlock the huge potential of consumer lending by the Nigerian financial industry.
Source: Rosabon Financial Services
When people and businesses gain genuine access to financial services, they gain the ability to transact securely, build savings, and access credit. That access creates the conditions for progress: more stable revenues, better business decisions, and the capacity to grow. Progress, sustained over time, is what produces financial happiness. This framework is how Moniepoint measures its impact.
According to Moniepoint 2025 Impact Report, titled creating financial happiness; “Financial happiness is the feeling of confidence and ease that comes with financial freedom and well-being. It is a condition that develops over time and requires a specific set of enablers to take hold.
For millions of people and businesses across Nigeria, those enablers, like tools and solutions to manage their finances, have historically been out of reach. Moniepoint was built to change that, and this change, for us, begins with inclusion”.
Across the world, access to digital tools is a key driver of financial inclusion. The World Bank’s Global Findex 2025 report finds that more than 60% of adults in low- and middle income economies now make or receive digital payments. In Nigeria, this figure is around 54%. Moniepoint has been a key driver in expanding this access with its POS terminals. “Our terminals also drive financial inclusion for individuals.
The report stated that, in 2025, Moniepoint enabled 100 million people to make payments via their POS terminals across the country. For customers in communities where bank branches are scarce or non-existent, a Moniepoint terminal at their local shop, market stall, or fuel station provides reliable access to digital financial services.
They can make purchases, withdraw cash, and manage their money without travelling long distances or depending solely on physical currency. Critically, customers without cards can complete transactions through direct bank transfers to the terminal’s account.
Beyond practical benefits, Moniepoint terminals have also introduced a new layer of trust to everyday commerce. “When network issues make it unclear if a payment went through, the Moniepoint terminal’s loud beep provides instant confirmation for everyone, building trust in digital payments with every transaction”.
Moniepoint POS terminals operate across all 774 local governments in Nigeria, ensuring that small sellers and large stores can accept payments reliably, regardless of location.
In 2025, millions of Nigerians, businesses and individuals alike, accessed Moniepoint services through its mobile app. Top among them are groups like women and low-income earners, who have historically been excluded from formal banking. Inclusion of women is particularly important, as they typically manage household spending and informal savings but are frequently left out of structured financial systems. “Through our app, they are gaining financial independence and greater control over their economic decisions,” the report added.
For millions of Nigerians, debit cards represent a move away from the limits of cash transactions. They enable safer, more reliable everyday payments, particularly as more local businesses begin to accept digital payments.
Moniepoint debit cards are designed to meet this need. In 2025, Moniepoint customers completed over 300 million card transactions at physical locations, largely driven by essential, food-related purchases. Most of this spending took place at neighbourhood provision shops where households buy everyday items such as rice, cooking oil, and soap.
“We’ve made access to our cards intentionally simple. Customers can get a Moniepoint debit card by requesting it within their mobile app or from neighbourhood agents, without lengthy paperwork or waiting periods. By lowering these barriers, more people are able to access financial tools and participate in the formal financial system.
“Our cards also safeguard our customers’ financial information. They don’t carry special markings or any identifiers that could expose our customers or put their financial security at risk. In the event of loss, this reduces the likelihood of targeted fraud or misuse.
“When people can pay with their debit cards at their neighbourhood stores, they can manage their spending, reduce cash handling, and transact more securely. Merchants also benefit, recording higher transaction volumes and more consistent customer activity.
“Moniepoint helps millions of businesses and individuals across Nigeria access seamless payments and banking, every day. The widespread adoption of our tools and services, as highlighted, demonstrates our critical role in expanding financial access, supporting everyday commerce, and enabling more Nigerians to participate safely and consistently in the digital economy,” the report noted.
ChatPay has launched Africa’s conversational banking platform, enabling individuals and businesses to access financial services through WhatsApp.
The Lagos-based fintech startup, is in controlled rollout, connecting WhatsApp to linked-bank management, airtime and supported electricity payments through simple conversations.
The company said the platform is designed to enable users to send money, pay bills, buy airtime and manage business transactions within WhatsApp conversations, subject to the completion of regulatory approvals and integration with licensed banking partners.
According to ChatPay, the platform is operated by CP Technology Limited and is currently undergoing a phased rollout ahead of its planned public launch.
The company said the initiative is intended to simplify access to financial services by leveraging WhatsApp, which it estimates is used by more than 50 million Nigerians monthly.
Speaking on the idea behind the platform, Adeoluwasubomi Odebunmi, product lead and co-founder, said the concept emerged while she was studying Software Engineering at Babcock University.
“I saw the gap while I was still in school—how much friction there was just to move money. I didn’t want to just study the problem. I wanted to help fix it,” she said.
Odebunmi said she had previously worked on software solutions spanning e-commerce, real estate management, school administration and artificial intelligence applications before co-founding ChatPay.
Aseoluwa Siyanbola, growth lead and co-founder, said his experience managing Nigerian bank accounts while studying abroad highlighted some of the challenges users face with digital banking services.
According to him, difficulties such as one-time password (OTP) failures and inconsistent banking applications inspired the team to explore conversational banking solutions.
“We each encountered similar challenges and came together to build a solution that simplifies everyday financial transactions,” he said.
cAbraham William, tech lead and co-founder, said the company is focused on improving access to financial services through a platform that many Nigerians already use daily.
“We want to make financial services easier to access by allowing people to carry out transactions through a familiar messaging platform,” he said.
William said he oversees the company’s engineering, technology strategy and system architecture.
ChatPay said its services will be introduced in phases as regulatory requirements are met and integrations with banking partners are completed.
The company added that its newly launched “Founding 2,500” programme will enable selected early users to test features, provide feedback and participate in product development before the platform’s wider rollout.
According to the company, interested users can register for the waitlist and the Founding 2,500 programme through its website.
Founded by Odebunmi, Siyanbola and William, ChatPay said its long-term goal is to expand conversational banking services beyond Nigeria into other African markets after its domestic rollout.
United Bank for Africa (UBA) Plc has been named Nigeria’s Best Bank for Retail Banking and Best Bank for Sustainability Leadership (ESG) at the 2026 Euromoney Awards for Excellence, reinforcing its position as one of Africa’s leading financial institutions.
The awards were presented on July 17 at The Peninsula London in the United Kingdom, recognising financial institutions that have demonstrated outstanding performance, innovation, customer impact and sustainable banking practices.
The double recognition highlights UBA’s growing influence in retail banking and its commitment to advancing environmental, social and governance (ESG) principles across its operations.
According to Euromoney, UBA distinguished itself through a series of sustainability initiatives, including the introduction of a Green Financing Facility designed to support households and businesses transitioning to renewable energy.
The publication also cited the bank’s ₦5 billion financing programme, implemented in partnership with the Bank of Industry (BOI), to provide funding for women-owned businesses.
Euromoney further recognised UBA’s commitment to achieving net-zero carbon emissions by 2050, describing it as a demonstration of the bank’s long-term sustainability strategy.
The publication also highlighted the bank’s efforts to integrate sustainability into its operations through the deployment of solar-powered energy solutions across 50 branches and comprehensive ESG capacity-building programmes that have trained more than 16,000 employees across the UBA Group.
In the retail banking category, Euromoney noted that UBA continued to consolidate its position as one of Africa’s largest retail banking institutions.
According to the publication, the bank expanded its customer base to more than 37 million by the end of 2025, while retail banking revenue increased more than fourfold to ₦429.5 billion.
The awards also recognised UBA’s continued investment in digital banking innovation, particularly enhancements to its artificial intelligence-powered chatbot, LEO.
Euromoney noted that LEO became Africa’s first AI-powered banking platform to facilitate cross-border money transfers in local currencies through the Pan-African Payment and Settlement System (PAPSS).
Commenting on the awards, UBA’s Group Managing Director and Chief Executive Officer, Mr Oliver Alawuba, described the recognition as a validation of the bank’s commitment to delivering value to customers while promoting sustainable development across Africa.
“To be recognised as Nigeria’s Best Bank for both ESG and Retail Banking in the same year sends a powerful message that sustainable banking and commercial success are mutually reinforcing.
“At UBA, we are committed to financing Africa’s future, supporting businesses and communities, promoting financial inclusion, and delivering innovative banking solutions that improve lives.
“These awards belong to our customers for their confidence in us and to every member of the UBA family whose dedication continues to make our vision a reality,” he said.
Also speaking, UBA’s Group Head, Marketing, Brand and Corporate Communications, Mrs Alero Ladipo, said the awards reflected the bank’s unwavering commitment to putting customers at the centre of its operations.
According to her, every innovation, investment and banking solution introduced by UBA is aimed at creating exceptional value for customers while expanding access to financial services.
“These awards are a powerful affirmation of our Customer First philosophy.
“Whether it is supporting entrepreneurs with access to finance, enabling seamless digital payments, advancing clean energy financing or expanding financial inclusion across Africa, UBA remains focused on delivering meaningful impact.
“We are honoured that one of the world’s most respected financial publications has recognised these efforts,” she said.
UBA currently operates in 20 African countries, as well as the United Kingdom, United States, France and the United Arab Emirates, serving more than 45 million customers through a combination of digital banking platforms and physical branch networks.
The bank said it remains committed to strengthening financial inclusion, driving innovation and supporting sustainable economic development across Africa and beyond.
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