The National Credit Guarantee Company Limited (NCGC) is seeking to make borrowing more affordable for Nigerian micro, small and medium-sized enterprises (MSMEs) by reducing the risks financial institutions face when extending loans to businesses.

The company’s Managing Director and Chief Executive Officer, Dr Bonaventure Okhaimo, disclosed this on Tuesday during a press briefing at the State House in Abuja, explaining that credit guarantees could help reduce the risk premiums lenders incorporate into interest rates.

According to Okhaimo, financial institutions consider the cost of funds, inflation and borrower risk when setting lending rates. However, MSMEs often face additional challenges because they lack sufficient collateral to qualify for loans.

NCGC aims to address this constraint by guaranteeing part of eligible loans, thereby reducing the potential losses lenders may incur when borrowers default.

“What NCGC is doing now is to attack that risk premium,” he said.

Okhaimo explained that the company neither determines interest rates nor lends directly to businesses. Instead, it provides partial credit guarantees to participating financial institutions, potentially enabling them to finance businesses that might otherwise struggle to meet lending requirements.

As of October 21, 2026, NCGC guarantees had supported loans worth ₦64.13 billion, backed by ₦30.19 billion in guarantee value.

The scheme had reached 174,495 borrowers across Nigeria’s 36 states and the Federal Capital Territory through 19 participating financial institutions. These include commercial banks, microfinance banks and development finance institutions.

The programme has also helped extend formal credit to 22,616 people who had never previously accessed financing through formal channels.

Women accounted for 74,503 beneficiaries, representing 42.7 per cent of the total borrowers. Meanwhile, trade and commerce, agribusiness and agro-processing collectively accounted for more than 80 per cent of those supported.

These figures reflect the programme’s reach among businesses that depend on financing to sustain operations, purchase inventory, invest in production and pursue expansion opportunities.

To address credit barriers affecting women entrepreneurs, NCGC has introduced GuaranteeHer, a gender-responsive credit guarantee initiative designed to improve access to loans for women-owned businesses.

The initiative aims to facilitate more than ₦100 billion in lending over five years, finance at least 20,000 women-owned MSMEs and support 150,000 jobs.

Under GuaranteeHer, NCGC provides for guarantee coverage of up to 70 per cent of eligible loan exposure, subject to a maximum obligor limit of ₦50 million per borrower.

By sharing part of the lending risk, the programme is intended to encourage participating financial institutions to extend credit to eligible women-owned businesses. It could offer an additional financing route for women entrepreneurs who struggle to obtain loans because of inadequate collateral.

Okhaimo also revealed that NCGC was working with the Central Bank of Nigeria to explore arrangements that could allow credit guarantees to provide capital relief for lenders.

If implemented, the proposed arrangements could encourage financial institutions to increase lending to MSMEs by easing some of the capital constraints associated with extending credit.

The Federal Government established NCGC on May 29, 2025, with the approval of President Bola Tinubu. The Central Bank of Nigeria licensed the company on August 9, 2025, and it operates under the supervision of the Federal Ministry of Finance.

NCGC has a capital base of ₦100 billion, with four institutions holding equal 25 per cent stakes. They are the Bank of Industry, Ministry of Finance Incorporated, Nigeria Sovereign Investment Authority and Nigerian Consumer Credit Corporation (CREDICORP).

Source: MSME Africa Online