Nigeria’s Lending System Needs a Shift From Collateral to Cash Flow - Moniepoint

Moniepoint Pushes Cash Flow Lending as Nigeria’s Formal Credit Access Rises

Moniepoint Group Chief Executive Officer, Tosin Eniolorunda, has called for a shift towards cash-flow-based lending in Nigeria, arguing that businesses should be assessed by how they generate and manage money rather than primarily by the collateral they can pledge.

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The call comes as formal credit access among Nigerian adults increased to 10 per cent in 2026 from 6 per cent in 2023, according to the 2026 Access to Financial Services in Nigeria (A2F) Survey conducted by Enhancing Financial Innovation and Access (EFInA).

Moniepoint said greater use of transaction data could help lenders identify businesses with consistent revenue and cash flows that may otherwise struggle to access conventional credit because they lack sufficient formal collateral.

Formal Credit Access Rises to 10%

The EFInA survey found that formal financial inclusion reached 73 per cent in 2026, representing approximately 87.2 million adults, compared with 64 per cent in 2023.

Formal credit penetration also increased from 6 per cent to 10 per cent during the same period, although it remains significantly below the 40 per cent target under Nigeria's National Financial Inclusion Strategy.

The survey was based on 18,679 adults across all 36 states and the Federal Capital Territory, with data collected between April and June 2026.

The increase suggests that more Nigerians are gaining access to formal financial services, but the relatively low level of formal credit penetration highlights the continuing gap between financial inclusion and access to productive financing.

Transaction Data Could Expand Business Lending

Moniepoint said transaction data can provide lenders with a clearer understanding of the financial performance of businesses.

Under a cash-flow-based approach, lenders can examine how money moves through a business, including its revenue patterns and ability to meet financial obligations, rather than relying mainly on physical assets as security.

This could be particularly relevant for small and informal businesses that generate regular income but lack land, buildings or other conventional assets that banks typically require as collateral.

Eniolorunda said trust must also remain central to the expansion of financial services, noting that access to financial products would have limited value without confidence in the institutions providing them.

Women and Underserved Businesses Gain Ground

The A2F survey recorded improvements in formal financial inclusion among women business owners and farmers.

Formal inclusion among women business owners increased from 67.5 per cent to 76.3 per cent, while inclusion among women farmers rose from 42.7 per cent to 53.6 per cent.

Moniepoint argued that cash-flow-based lending could help build on these gains by giving more underserved entrepreneurs access to formal business credit.

The company also reported that women accounted for 36 per cent of its loan book, compared with an industry benchmark of between 15 per cent and 25 per cent.

Credit Growth Comes With Repayment Pressure

Despite the increase in formal borrowing, the A2F findings also point to weaknesses in the quality and purpose of some credit.

Coping and consumption loans accounted for 40.8 per cent of formal borrowing in 2026, up from 31.7 per cent in 2023. This exceeded productive enterprise borrowing, which stood at 34.3 per cent.

The survey also found that 45.8 per cent of formal-credit users reported some level of repayment stress.

Only 30.7 per cent of formally included adults were classified as financially healthy, leaving a substantial proportion of Nigerians either financially vulnerable or in a coping position.

The figures highlight the importance of ensuring that expanding credit access does not simply increase household or business debt without improving productive capacity and income generation.

What Cash-Flow Lending Could Mean for Property Finance

A wider shift towards cash-flow-based lending could also have implications for Nigeria's housing and real estate markets.

Property developers, contractors and small businesses operating across the construction value chain often face financing constraints, particularly when they lack sufficient collateral to secure conventional loans.

Greater reliance on transaction histories and business cash flows could potentially allow lenders to assess smaller developers and property-related businesses that have established revenue streams but limited fixed assets.

Such financing could support working capital, construction activity, equipment purchases and expansion across parts of the housing supply chain.

However, the approach would still require strong underwriting standards. Cash-flow information can improve lenders' understanding of a borrower's capacity, but it does not remove the risks associated with weak demand, high construction costs, interest rates or unstable business conditions.

Trust Remains Central to Financial Inclusion

The A2F survey also highlighted the importance of trust in determining how Nigerians use financial services.

According to the survey, 96.9 per cent of adults who trusted their financial provider had conducted a financial transaction within the previous 90 days, compared with 65.6 per cent among those who did not trust their provider.

The finding suggests that increasing the number of financial products available to Nigerians may not be sufficient on its own. Confidence in financial institutions, transparency and reliable service delivery will also influence whether individuals and businesses actively use formal financial services.

Outlook

Nigeria's rise in formal credit access to 10 per cent represents progress, but the figure remains well below the country's 40 per cent financial inclusion target.

Moniepoint's call for cash-flow-based lending reflects a broader effort to use transaction data and digital financial records to reach businesses that conventional collateral requirements may exclude.

For Nigeria's housing and real estate sector, wider access to appropriately structured business finance could help strengthen the financing pipeline for smaller developers and businesses across the construction value chain.

The bigger challenge will be ensuring that increased credit translates into productive investment rather than deeper financial stress, particularly as businesses and households continue to operate under significant cost pressures.

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