The next decade of Nigerian credit will be shaped less by balance sheet size and more by two structural shifts, embedded finance and artificial intelligence. That is the picture that emerges from Credit Direct’s 2025 Nigeria Credit Landscape Report, which lays out ten insights on where the country’s lending market is heading.
The report describes embedded finance as a major change in how lending works. Instead of being sold as a separate product, loans are being built directly into the apps and platforms people already use, like those for sending money, receiving salaries, shopping, transport, healthcare, and school payments. When loans are offered this way, lenders spend less to find borrowers, make better decisions about whom to lend to using real-time information, and can identify who is more likely to pay back because the loan matches how the borrower actually earns and spends.
Furthermore, the report also frames AI and automation as a fundamental reshaping of how credit decisions get made. Document-heavy underwriting is set to give way to real-time analysis of cash flows, behaviour, and platform activity. Several Nigerian lenders are already running this play, using machine-learning models on payment patterns and platform usage to score borrowers with little or no formal credit history.
Open banking is what makes both forces operational at scale. The Central Bank’s Open Banking Regulatory Framework and Operational Guidelines have set up consent-based data sharing through standardised APIs, and the report expects lenders to rely more on verified transaction histories than on static paperwork.
Furthermore, the report’s clearest prediction is that Nigeria’s credit market will split. Banks will concentrate on corporate, secured, and longer-tenor lending. Non-banks will take the lead on consumer and informal-sector credit. The reason, the report says directly, is that finance companies and fintechs can reach borrowers through mobile platforms, embedded finance channels, and alternative distribution networks.
The report is also honest about the cost. Non-bank portfolios carry significantly higher default rates than banks, both because of whom they lend to and because growth has at times outpaced underwriting.
The report identifies several other shifts worth mentioning alongside these two. The report calls payroll lending the country’s most reliable form of consumer credit. Automatic deductions at source and employer-verified income keep its default rates lower than other consumer segments, even when the macro picture is rough.
Insurance is the next piece moving into the credit package. The report expects micro-coverage for health, life, asset damage, or income disruption to be built into loan repayment schedules so that shocks don’t tip borrowers straight into default. Risk-based pricing follows from open banking and richer data, replacing the flat rates that historically had stronger borrowers subsidising weaker ones.
The demand side also opens up. The report mentions the informal sector as the largest opening, calling it the “plug for credit growth in Nigeria” and estimates that bringing in over 55 million adults could accelerate credit penetration.
The solution lies in using alternative data and embedded distribution. POS networks, merchant wallets, logistics platforms, and digital service channels generate transaction records that make informal cash flows visible, measurable, and easier to finance.
The diaspora is the other major opening. The report points to two-way diaspora credit pipes as the next phase, where income, savings, and creditworthiness earned abroad can support borrowing and investment at home, while domestic credit products also serve diaspora needs.
Lending allocation itself is expected to shift toward productive sectors, including agriculture value chains, logistics and mobility, healthcare, education, housing, light manufacturing, and trade infrastructure, where credit can be structured around receivables, inventory, or service delivery.
Taken together, the report gives Nigerian lenders a clear playbook. The tech tools, open banking, alt-data, AI scoring, are becoming standard, so they no longer offer an advantage on their own. What matters now is distribution, meaning how lenders reach borrowers through platforms, payroll systems, or merchants. And as loan books grow, careful risk management is what keeps them healthy.
The news is harder for banks. The way they have always lent money, through branches, paperwork, and slow approvals, will not be how most household loans get approved in the coming years. The report says it carefully, but non-bank lenders now have the advantage.
The report points to several things that still need to happen. Regulators have to keep working on the rules around open banking, digital identity, and consumer protection. And non-banks have to make sure more borrowers actually pay them back, even as they lend to more people.
In conclusion, embedded finance and Artificial intelligence are pulling Nigerian credit onto digital, platform-based rails. And the lenders moving fastest in that direction are not the ones who have led the market so far.
The full Nigeria Credit Landscape Report 2025 is available to download from Credit Direct.
About Credit Direct
Credit Direct is building Africa’s leading embedded finance business by integrating credit into the supply chains and payment flows of partners, unlocking financial success for individuals and businesses. The company also provides retail investment solutions, expanding its role from access to credit to broader financial growth and wealth-building. Credit Direct has served millions of customers nationwide, including those historically underserved by traditional banking. Credit Direct is a wholly owned subsidiary of First City Monument Bank (FCMB) Group Plc.
