A credit partnership between fintech infrastructure provider Nomba and Globus Bank is reshaping the conversation around small business lending in Nigeria, after both institutions reported a non-performing loan (NPL) ratio of below 1 per cent on a N21.3 billion merchant credit portfolio deployed over 18 months.
The performance, which cuts against banking sector trends where credit risk remains elevated, is drawing attention to the potential of data-driven underwriting models in a market where the Central Bank of Nigeria (CBN) has repeatedly flagged non-performing loan ratios above its 5 per cent prudential threshold in several lending segments, particularly those exposed to small and medium-sized enterprises (SMEs).
The jointly managed portfolio spans wholesale and retail trade (39 per cent), professional services (28 per cent), food and hospitality (11 per cent), oil and gas (11 per cent), and fast-moving consumer goods (8 per cent), offering a diversified exposure across key real-sector segments of the economy.
At the core of the model is a departure from traditional credit assessment frameworks that rely heavily on collateral documentation, audited financial statements, and historical credit records. Instead, lending decisions are anchored on real-time transaction data generated through Nomba’s payment infrastructure, which provides continuous visibility into merchant cash flows and business activity.
According to the firms, this approach allows lenders to construct dynamic financial profiles of borrowers based on actual sales volumes, settlement patterns, and revenue flows, rather than static or backward-looking documentation. Loan sizing and repayment structures are therefore aligned with observed business performance, creating a direct link between repayment obligations and operational cash generation.
This model directly addresses the absence of formal financial records, considered one of the most persistent constraints in Nigeria’s SME financing landscape.
Despite consistent business activity across the informal and semi-formal economy, limited documentation continues to restrict access to credit, with global development estimates, including those from the World Bank, pointing to multi-trillion-naira unmet credit demand in Nigeria.
A second structural feature of the model is a digitised collateral framework embedded within the payment ecosystem. Rather than relying on physical assets such as land or machinery, the system ties credit access to continued use of Nomba’s platform. This creates what the companies describe as “operational collateral,” where repayment compliance is integrated into the borrower’s day-to-day transaction flows.
Under this arrangement, merchants maintain access to payment processing, settlement services, and business tools provided they remain current on repayment obligations. Default risk is mitigated not through post-loan recovery processes, but through continuous engagement with the financial infrastructure itself.
The approach reflects a broader shift in global fintech lending models, where behavioural and transactional data are increasingly used to replace traditional credit scoring mechanisms. In Nigeria, where a significant proportion of SMEs lack acceptable collateral as noted by the International Finance Corporation (IFC), such models are gaining attention as potential alternatives to conventional secured lending.
Executives from both institutions argue that the success of the portfolio underscores the need to rethink lending performance metrics in the financial sector. Rather than focusing primarily on disbursement volumes, they say greater emphasis should be placed on repayment quality and credit sustainability.
Nomba disclosed that it plans to scale the model significantly, targeting a N500 billion credit book over time through expanded partnerships with commercial banks and development finance institutions. The company said future deployment will extend into logistics, healthcare, and manufacturing sectors, where transaction data can similarly be leveraged to improve credit decisions.
Elias Igbinakenzua, managing director and chief executive officer of Globus Bank, said the partnership reflects a disciplined approach to credit allocation anchored on verified data rather than documentation alone.
“Capital is deployed against verified transaction data, not against documents. The NPL performance of this portfolio is the clearest evidence of what disciplined, infrastructure-led lending can produce,” he said.
He added that the strength of the portfolio lies not in its size, but in the quality of underwriting, noting that data-backed lending significantly reduces uncertainty in borrower assessment.
For Nomba, the results reinforce its position that Nigeria’s credit market is overly focused on disbursement volumes rather than repayment outcomes. Chief Executive Officer, Yinka Adewale, said the industry must recalibrate its priorities if it is to close the country’s widening SME financing gap.
“The Nigerian credit conversation has been captured by one question: how much have you deployed? That is the wrong question. The right question is how much has come back, and why,” Adewale said.
He added that the sub-1 per cent NPL ratio on the N21.3 billion portfolio demonstrates the effectiveness of infrastructure-led underwriting, where real-time transaction data, embedded repayment mechanisms, and active borrower engagement replace traditional credit heuristics.
