In a recent statement, Moniepoint's CEO, Tosin Eniolorunda, emphasized the need for Nigerian lenders to prioritize cash flow over collateral when assessing business loans. This call to action comes in light of the EFInA 2026 Access to Financial Services in Nigeria survey, which revealed an increase in formal credit use among Nigerian adults from 6% in 2023 to 10% in 2026. Moniepoint argues that understanding how businesses generate and manage cash flow can provide a more accurate picture of their creditworthiness, especially for those lacking traditional collateral.
This shift in lending philosophy is critical for Nigeria, where formal financial inclusion has risen to 73%. The country aims to achieve a 40% formal credit penetration as part of its National Financial Inclusion Strategy. By leveraging transaction data, lenders can identify businesses that may have consistent cash flows but lack the assets typically required for securing loans. Eniolorunda also highlighted the importance of trust in financial services, noting that a high percentage of users who trust their providers engage in regular transactions, underscoring the need for transparency and reliability in lending practices.
Looking ahead, the focus on cash flow-based lending could attract more investments into Nigeria's financial sector and encourage the growth of micro, small, and medium enterprises (MSMEs). However, the recent EFInA survey also pointed out the rising trend of coping and consumption loans, which accounted for a significant portion of borrowing. This raises concerns about the sustainability of financial health among borrowers, as many are experiencing repayment stress. Stakeholders will need to balance access to credit with responsible lending practices to ensure that the growth in formal credit does not lead to increased financial vulnerability.