Nigerian Lenders Urged to Address Credit Process Gaps

Nigerian lenders are currently grappling with significant infrastructure gaps in their credit processes, as highlighted by Winston Osuchukwu. The Central Bank of Nigeria has reported a non-performing loan (NPL) ratio of 8.03%, surpassing the regulatory limit of 5%.

This situation underscores deeper structural flaws within the banking sector, which rely on outdated risk models and static internal risk acceptance criteria. The article identifies three critical gaps in the core credit infrastructure that need addressing: the fragmented view of borrower risk, insufficient data sharing among credit bureaus, and the need for a unified data architecture.

The current credit bureau coverage in Nigeria is low, with data often inconsistent, failing to capture borrowers' actual earning and spending behaviors. To mitigate future defaults, lenders must adopt a dynamic approach to risk management, utilizing high-frequency behavioral data and real-time assessments to refine underwriting criteria.

This shift is essential for lenders to effectively manage risks and improve recovery outcomes.