A growing disconnect is emerging between financial inclusion and credit access. Although more Nigerians are engaging with formal financial services than ever before, the ability to obtain loans through regulated financial institutions remains limited, raising questions about the depth and effectiveness of inclusion efforts.
The latest edition of the Nigeria’s Credit Landscape Report 2025 reveals that despite more than 64 percent of Nigerian adults being financially included, only about six percent currently access credit through formal financial institutions.
The finding exposes the fact that financial access is expanding, but the ability of households and businesses to obtain productive financing remains largely out of reach.
The report, published by Credit Direct in June 2026, highlights a financial system where inclusion indicators have improved considerably over the years, yet credit penetration remains among the lowest relative to the country’s economic potential.
According to the report, credit extended to Nigeria’s private sector amounts to just 13.1 percent of Gross Domestic Product (GDP), significantly below levels recorded in several peer African economies, including Kenya and South Africa.
The implication is that millions of entrepreneurs, small business owners and households continue to face difficulties securing the capital required to expand businesses, create jobs, improve productivity or weather economic shocks.
The report notes that Nigeria’s real sector recorded sustained expansion throughout 2025, with manufacturing, agriculture and services posting positive growth indicators.
As businesses expand operations and consumer demand gradually recovers, the appetite for financing has increased across several segments of the economy.
Yet access to formal credit continues to lag behind demand.
Economists have long argued that private-sector credit plays a critical role in supporting investment, productivity growth and job creation.
When businesses cannot access affordable financing, expansion plans are delayed, innovation slows and economic opportunities remain unrealised.
Despite their critical role in driving employment and economic activity, small and medium-sized enterprises (SMEs) continue to face significant financing constraints. Reflecting the scale of the challenge, microfinance banks account for just 5.4 percent of the country’s total loan portfolio, limiting credit access for businesses traditionally underserved by commercial lenders.
Although financial inclusion initiatives have successfully brought more people into the formal financial system, many remain unable to access the range of financial products required to build sustainable wealth and resilience.
Industry stakeholders increasingly argue that financial inclusion should not be measured solely by account ownership.
Rather, true inclusion should encompass access to savings, insurance, investment products and affordable credit.
This position was echoed by Mutual Benefits Assurance Plc, which said the findings reinforce the need for a more holistic approach to financial inclusion.
According to the insurer, access to finance alone is insufficient if individuals and businesses lack the tools needed to protect themselves against financial shocks.
The company argues that financial resilience depends on a combination of borrowing capacity, savings discipline and risk protection mechanisms.
Speaking on the report, Femi Asenuga, managing director of Mutual Benefits Assurance Plc, said the national conversation around inclusion needs to evolve beyond traditional metrics.
“The conversation around financial inclusion must go beyond opening bank accounts and accessing loans. True financial empowerment is achieved when individuals and businesses can access financing opportunities while also protecting their income, assets, families and future aspirations from unforeseen risks,” he said.
His comments reflect a growing recognition among financial service providers that inclusion without resilience may offer only temporary gains.
Many Nigerians remain vulnerable to economic setbacks despite participating in the formal financial system.
Unexpected events such as illness, accidents, fire outbreaks, business disruptions or job losses can quickly reverse years of financial progress.
According to Asenuga, insurance and structured savings remain critical safeguards against such risks.
“For many Nigerian families and business owners, a single unexpected event can erase years of financial progress. This is why insurance and disciplined savings remain critical pillars of long-term financial resilience,” he noted further.
The issue has become increasingly relevant as economic uncertainty, inflationary pressures and income volatility continue to affect households and businesses across the country.
The report’s findings also raise questions about how effectively Nigeria’s financial institutions are supporting entrepreneurship and enterprise development.
Small businesses are widely regarded as the backbone of the Nigerian economy, contributing significantly to employment generation and economic activity.
However, many continue to face challenges accessing affordable financing due to collateral requirements, high interest rates, limited credit histories and perceived lending risks.
As a result, many entrepreneurs remain dependent on personal funds or informal sources of capital to finance operations.
Against this backdrop, microfinance institutions are expected to play a more prominent role in extending financial services to underserved populations.
Mutual Microfinance Bank says it has continued to expand financing support for small businesses, salary earners, traders and emerging enterprises.
According to the institution, loans disbursed reached N1.372 billion as of December 31, 2025.
The growth trajectory continued into 2026, with the loan portfolio increasing to N1.558 billion by the end of the first quarter.
