Digitising Microcredit in Nigeria - Sep 2017

Approximately one third of Nigerian adults borrow money, mostly from family and friends. Only 6% of these borrowers access loans from formal financial services providers such as banks, microfinance banks or mobile money providers, despite the fact that more than half of them use the formal financial system for other financial needs. While expanding access to formal credit in Nigeria can benefit individuals and the economy as a whole, structural challenges have historically limited Nigerians’ access to formal loans.

In September 2017, EFInA conducted a study to explore the tremendous opportunity that digital microcredit offers in promoting individual well-being, nationwide financial inclusion and a more robust formal financial sector and economy. Findings from the study revealed that through new technology and data sources, firms can now provide microloans to individuals who were previously invisible to the formal financial sector by leveraging lifestyle information, such as mobile phone and social media usage patterns to assess creditworthiness.

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