The National Credit Guarantee Company (NCGC) has issued ₦21.59 billion in guarantees, helping participating financial institutions extend ₦46.95 billion in credit to 67,512 borrowers across 25 states and the Federal Capital Territory, according to President Bola Ahmed Tinubu.
Tinubu disclosed the figures while marking the first year of the NCGC’s operations, highlighting the company’s role in addressing one of the major challenges facing Nigerian businesses and individuals: access to affordable and formal credit.
Turning Guarantees Into Actual Credit
At the centre of the NCGC model is a simple financing challenge.
Many businesses may have viable operations but struggle to secure loans because they lack sufficient collateral or an established credit history. Consequently, lenders may consider such borrowers too risky even when their businesses have the potential to generate income and repay loans.
The NCGC seeks to address part of that problem by sharing lending risk with participating financial institutions.
According to Tinubu, the ₦21.59 billion in guarantees has helped unlock approximately ₦46.95 billion in credit. That means every ₦1 in guarantees has supported about ₦2.17 in credit, based on the President’s calculation.
The distinction is important because the guarantee itself is not the same as money directly handed to borrowers. Rather, it provides participating lenders with additional confidence to extend credit.
Reaching Thousands of Borrowers
Meanwhile, the scale of the programme extends beyond the total value of loans.
The NCGC has reached 67,512 end borrowers across 25 states and the FCT, according to the figures announced by Tinubu.
Among those beneficiaries are 11,374 women, while 33.5 per cent of all beneficiaries are reported to be first time formal borrowers.
That first time borrower figure provides another way to assess the programme.
For more than 22,000 Nigerians, according to Tinubu’s calculation, participation represents an entry point into the formal credit system. Successful repayment can subsequently help borrowers establish credit records that may support future access to financing.
Therefore, the impact of the programme is not limited to the initial loan. Building a reliable credit history can potentially create a longer financial pathway for borrowers.
Financial Institutions Form the Link
The NCGC does not operate independently of the financial system.
The company currently works with 19 financial institutions, comprising 13 commercial banks, three microfinance banks and three development finance institutions, according to the President.
This network provides the connection between the guarantee mechanism and borrowers.
Financial institutions assess borrowers, provide the loans and manage repayment, while the guarantee helps reduce part of the risk associated with lending to qualifying businesses and individuals.
As a result, the programme depends on effective cooperation between the guarantee company and participating lenders.
Small Businesses Remain a Major Focus
Access to credit has particular importance for small businesses because many depend on working capital to maintain daily operations and expand.
A trader, for example, may need financing to restock inventory, while a manufacturer may require funds to purchase machinery or accept a larger order.
Without adequate financing, businesses can struggle to take advantage of new opportunities even when demand exists.
Credit guarantees can therefore help address the gap between business potential and the willingness of lenders to provide financing.
However, access to credit also comes with repayment obligations. The long term success of the programme will consequently depend not only on the amount of money disbursed but also on responsible borrowing and repayment.
Women Are Part of the Beneficiary Base
The participation of more than 11,000 women also highlights the importance of expanding formal finance to women owned and women led businesses.
Historically, access to collateral and formal financial records has presented challenges for some entrepreneurs seeking commercial financing.
The NCGC figures indicate that women represent a significant portion of beneficiaries during the company’s first year.
As the programme expands, continued monitoring of access by gender, sector, location and business size could provide a clearer picture of how widely the guarantee mechanism is reaching different categories of borrowers.
Credit Access and Job Creation
Beyond individual borrowers, the potential economic effect extends to employment.
Tinubu said businesses supported through NCGC guarantees account for an estimated 661,291 direct and indirect jobs.
That figure is an estimate attributed to the NCGC and should therefore be understood as a reported employment impact rather than a separately verified national employment statistic.
Nevertheless, the connection between business finance and employment remains important. When businesses obtain working capital, they can potentially increase production, expand operations and hire additional workers.
Consequently, measuring employment alongside credit disbursement can help policymakers understand the broader economic effects of the programme.
Building a Credit Based Economy
Tinubu has presented the NCGC as part of a wider effort to move Nigeria toward a more credit based economy.
That objective involves creating financial institutions and mechanisms that allow more Nigerians to borrow through formal channels while building repayment histories.
The NCGC operates alongside other government backed financing initiatives, including the Nigerian Consumer Credit Corporation, the Nigerian Education Loan Fund, the Bank of Industry and the Development Bank of Nigeria.
Each institution addresses different financing needs, but together they form part of a broader effort to increase access to formal finance.
The Next Test Is Sustainability
Importantly, the first year provides an early measure of activity, but the longer term performance of the NCGC will depend on what happens as the programme expands.
The number of borrowers reached, value of guarantees issued and volume of credit unlocked will remain important indicators. However, repayment performance, business survival, employment outcomes and repeat access to credit will also matter.
Furthermore, lenders will need to maintain sound credit assessment practices even when guarantees reduce part of their exposure.
A sustainable credit system must therefore balance access with responsible lending.
From Risk Sharing to Economic Opportunity
Ultimately, the NCGC’s first year illustrates how a relatively smaller amount of risk coverage can support a larger volume of lending.
The ₦21.59 billion in guarantees linked to ₦46.95 billion in credit demonstrates the leverage built into the model, while the 67,512 borrowers reached show the breadth of its initial operations.
The bigger question now is whether that momentum can continue and whether more businesses and individuals can move from informal or limited financing into sustainable formal credit.
If the programme maintains responsible lending, effective risk management and broad access, the guarantee mechanism could become an important part of Nigeria’s evolving financial architecture.
For borrowers, however, the significance goes beyond receiving a single loan. A successful borrowing and repayment cycle can create something equally valuable: a formal credit history that opens the door to future financing and allows businesses to grow on a stronger financial foundation.
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