Opinion · New Telegraph
Most small businesses aren't uncreditworthy. They're invisible.
Nigeria's small businesses don't lack activity. They lack visibility. My argument is that the data they already create every day could help lenders assess them properly.
- Title
- SME financing gap: why better data could change the lending equation
- Published
- New Telegraph, 4 February 2025
- Author
- Oyewale Muftau
Nigeria's small business funding gap
Each square is ₦1 trillion
₦13tn
needed
₦1tn
actually lent
The dashed squares are the ₦12tn gap.
Source: Development Bank of Nigeria MSME Data Insight Dashboard, as cited in my New Telegraph article.
The argument in brief
A market trader may take hundreds of payments a week but have no audited accounts, so the bank declines. The business can repay. The lender simply cannot see it.
- 01
The problem isn't always ability to repay
A business can have loyal customers, steady sales and a good record of meeting its obligations, and still be turned down because it cannot provide audited accounts, collateral or a long credit history. Its capacity to repay is real. It just isn't visible to the lender.
- 02
The evidence already exists
Small businesses generate data every day: bank records, mobile-money and point-of-sale payments, stock turnover and cash flow. Combined properly, it gives a clearer picture of a business than many balance sheets.
- 03
Analytics can make lending fairer
Predictive analytics can identify repayment patterns and flag emerging risks, so lenders can structure finance around how a business actually earns, provided the data is used with consent and properly governed.