By Rukayat Moisemhe
A financial expert, Mr Gbemi Adelekan, has called for stronger credit infrastructure and consumer education to support digital lending in Nigeria.
Adelekan, the Chairman, Money Lenders Association, made the call in an interview with the News Agency of Nigeria (NAN) on Thursday in Lagos.
He said improved credit bureau systems, effective credit scoring and stronger consumer protection mechanisms were needed to ensure sustainable growth of digital lending.
Adelekan said increasing internet penetration, mobile payments, e-commerce and online banking were changing how Nigerians accessed financial services and increasing acceptance of digital transactions.
He said the trend had also increased demand for quick and convenient credit, particularly among individuals and small businesses facing difficulties accessing conventional financing.
According to Adelekan, Nigeria’s unbanked population had declined to 21 per cent of the adult population from 36 per cent in 2020.
He said digital lending was increasingly complementing conventional financial services as more Nigerians adopted technology-based financial solutions.
Adelekan cited data from the Nigerian Communications Commission, which he said showed broadband internet penetration had risen above 53 per cent as of January 2026.
He said the expanding digital economy was changing the profile of borrowers, with millennials and Generation Z increasingly adopting technology-based financial solutions for personal and business needs.
According to him, the growth of freelance work and small businesses had also increased demand for alternative sources of credit.
He said this was particularly important for people without the formal employment history often required by traditional lenders.
“Digital lending leverages online platforms to provide personal and business loans, allowing individuals to access funds quickly and conveniently without the traditional banking processes,” he said.
Adelekan, however, said digital lending faced challenges including loan defaults, inadequate credit information and the difficulty and cost of recovering small-value debts.
He said some borrowers deliberately defaulted on digital loans, treating loan applications as “free money”, thereby affecting lenders’ cash flow.
According to him, the situation could lead to higher interest rates on some digital loans and reduce credit available to low-income Nigerians.
He, therefore, urged the government to strengthen credit bureau systems and enforcement of credit reporting to help lenders assess borrowers and identify chronic defaulters.
The money lenders’ chairman also advocated stronger small claims court systems to facilitate faster and less costly resolution of small-value debt recovery cases.
He said the absence of collateral for small-ticket digital loans, in spite of the time and cost involved in court-based debt recovery, remained a challenge.
Adelekan also called for greater investment in consumer education to improve borrowers’ understanding of loan terms, repayment obligations and consequences of default.
He said effective credit scoring could discourage deliberate defaults while enabling lenders to price loans according to borrowers’ creditworthiness.
Adelekan stressed the need for regulation to ensure that digital lending did not expose consumers to abusive or predatory practices.
He noted that the Federal Competition and Consumer Protection Commission had continued to regulate the sector.
This included the Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations, 2025, which he said promoted transparency, consumer protection and responsible lending.
Adelekan said fintech companies were also deploying artificial intelligence, big data and machine learning to improve credit assessment and manage lending risks.
He said such technologies could also support more personalised financial services and improve lenders’ ability to assess borrowers.
Adelekan said the future of digital lending would depend on lenders, regulators and consumers building a responsible borrowing and lending culture.
He urged stakeholders to strengthen digital and financial literacy, credit infrastructure and consumer protection mechanisms to ensure digital lending supported inclusive economic participation. (NAN)
Edited by Chinyere Joel-Nwokeoma
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