By Grace Alegba, News Agency of Nigeria (NAN)
For millions of Nigerians who earn, trade and receive payments digitally but struggle to access formal loans, the Nigeria’s virtual asset reforms could offer a new route to credit.
Experts say digital transaction records could increasingly serve as an alternative source of credit information, helping banks and other lenders assess people and businesses that lack conventional collateral or extensive banking histories.
Prof. Chris Onalo, Registrar and Chief Executive Officer, National Institute of Credit Administration (NICA), said the reforms could help transform digital financial activity into useful credit information.
“Credit data is what the credit granting community needs to have an effective credit scoring system,” Onalo told the News Agency of Nigeria (NAN).
He said wallet histories, stablecoin receipts and peer to peer transaction records could provide lenders with insights into the financial behaviour of young Nigerians, MSMEs, freelancers and other underserved groups.
According to him, such information, when properly regulated and integrated with existing credit systems, could help lenders move beyond traditional requirements such as land and other physical collateral.
The development comes as Nigeria moves to establish a more coordinated framework for virtual assets.
President Bola Tinubu signed the Presidential Executive Order on Virtual Asset Coordination, 2026, on July 17, while the Nigeria Revenue Service (NRS) subsequently issued administrative tax guidelines covering cryptocurrencies and other virtual assets.
The reforms also provide for a Virtual Asset Council, chaired by the Central Bank of Nigeria (CBN), to strengthen coordination among relevant regulatory agencies.
The CBN, meanwhile, opened applications on Aug. 12 for the second cohort of its regulatory sandbox programme.
The programme is providing a controlled environment for fintechs, financial institutions and technology providers to test innovative products and business models under regulatory supervision.
For Onalo, the significance of the reforms goes beyond regulating cryptocurrencies.
He said they could help create a more reliable digital financial ecosystem in which transaction history becomes part of the information used to determine who qualifies for credit.
“Digital transactions can generate data that can help lenders understand the financial behaviour of borrowers,” he said.
Onalo said increased use of systems linked to the Bank Verification Number (BVN), National Identification Number (NIN) and other identity platforms could further strengthen the quality of digital credit information.
He said this could particularly benefit young Nigerians and small businesses that are economically active but remain outside conventional credit channels.
The NICA boss also identified remittances and cross border payments as areas where virtual assets could support economic activity.
He said freelancers, entrepreneurs and small businesses serving international customers could benefit from faster and more accessible digital payment channels.
However, Onalo warned that the benefits would depend heavily on how the reforms are implemented.
He cautioned that excessive compliance requirements, high costs and rigid regulations could push legitimate participants towards offshore platforms and less regulated peer to peer channels.
He advocated tiered licensing for virtual asset service providers, clear standards for digital collateral and integration of relevant virtual asset data into credit bureaus.
He also called for risk-based pricing and insurance products to support responsible digital lending.
Onalo said virtual assets should increasingly be considered as payment infrastructure and potential collateral rather than purely speculative instruments.
He identified stablecoin based trade finance, tokenised SME lending and government backed digital instruments as possible areas of growth under a credible regulatory framework.
He urged regulators to study international experience while developing rules suited to Nigeria’s economic realities.
Onalo also called for the involvement of professional bodies, including NICA, in the implementation of the reforms through technical expertise, training and certification.
“We cannot run away from virtual assets because Nigerians have already embraced them,” he said.
Dr Olayinka Odutola, Chief Executive Officer, Association of Enterprise Risk Management Professionals, agreed that digital transactions could become an important source of financial information.
“Digital transactions can evolve into financial data, then credit intelligence, responsible lending and greater financial inclusion,” Odutola said.
He, however, stressed that greater access to digital credit would not automatically translate into financial inclusion.
According to him, effective data protection, credit reporting, digital identity, consumer protection and responsible lending frameworks must accompany the reforms.
Odutola said stronger regulation could also reduce fraud, money laundering, cyber risks, market abuse and consumer losses associated with virtual assets.
He warned that regulation must not become so restrictive that legitimate businesses are forced outside the formal system.
“Good regulation should provide both protection and room for innovation,” he said.
Odutola said Nigeria should develop a risk-based framework before banks and institutional investors provide significant financing to virtual asset businesses.
He said lenders should assess licensing status, ownership, governance, financial strength, liquidity, cybersecurity and customer asset protection.
“They should also consider the volatility of digital assets before accepting them as collateral,” he said.
Odutola recommended appropriate valuation mechanisms, margins, concentration limits and stress testing for digital asset backed lending.
He said lenders must also consider possible losses arising from market crashes, cyberattacks, liquidity crises, platform failures and regulatory shocks.
“We should not make virtual asset businesses creditworthy by lowering lending standards.
“We should make them creditworthy by making their risks measurable, transparent and manageable,” he said.
The experts’ views point is a potentially important shift in Nigeria’s credit landscape from digital activity to formal credit.
For years, lack of collateral, inadequate documentation and limited credit histories have restricted access to formal financing for many individuals and small businesses.
The expansion of regulated digital financial activity could provide lenders with additional information to evaluate borrowers.
This could make transaction behaviour, rather than physical assets alone, increasingly relevant in determining access to credit.
But the experts stressed that the objective should not simply be to increase digital borrowing.
Odutola said financial inclusion must mean access to financial services that are appropriate, affordable, sustainable and responsible.
He warned that expanding digital credit without proper risk assessment, consumer protection and financial literacy could leave vulnerable borrowers over indebted.
According to him, Nigeria now has an opportunity to move from fragmented virtual asset activities towards a coordinated digital financial ecosystem.
If properly implemented, the reforms could support payments, remittances, SME financing, alternative credit assessment, tokenisation and cross border financial services.
The challenge, therefore, is to create a regulatory environment that protects consumers and financial stability without suppressing innovation.
Odutola said, “innovation must not outrun risk management”.
For Nigeria’s young entrepreneurs, MSMEs and millions of digitally active but underserved citizens, the success of the reforms could ultimately be measured by whether digital participation translates into access to affordable, responsible and sustainable credit.(NANFeatures)
Edited by Olawunmi Ashafa
If used, please credit the writer and the News Agency of Nigeria (NAN)