The Managing Director of Sofri, Mr. Paul Adebayo, has identified the lack of reliable data as a major obstacle to expanding credit access in Nigeria’s financial sector.
Speaking at Sofri’s relaunch media event in Lagos, Adebayo explained that the credit industry struggles with limited and low-quality data, which makes it difficult for lenders to properly assess risk and develop inclusive lending products. Without a strong data ecosystem, financial institutions face challenges in scaling loans to underserved populations.
Adebayo highlighted the Central Bank of Nigeria’s Global Standing Instruction (GSI) policy as a significant step forward. The GSI framework allows lenders to recover loan repayments from any bank account linked to a borrower’s Bank Verification Number (BVN), even if the borrower switches banks. “This is a game-changer for credit recovery and risk reduction,” he said.
Sofri is also adopting artificial intelligence and machine learning to improve credit assessments, especially for small loans ranging from ₦2,000 to ₦10,000. The company uses alternative data points such as phone usage, location, education, lifestyle patterns, and even social media presence to evaluate borrowers beyond traditional salary or employment history.
Adebayo noted, “If you have 10,000 followers on Instagram and I have 2,000, the probability that you will default is lower because your social capital is higher.” This “social credit” approach aims to widen access to credit for individuals typically excluded from formal banking.
The fintech’s strategy reflects a broader trend in Nigeria, where digital lenders are leveraging data analytics to reach over 38 million financially excluded adults. Uzoma Nwagba, CEO of Nigeria Consumer Credit Corporation (CREDICORP), also emphasized the need for improved regulation and credit reporting reforms to address the country’s credit challenges.
Currently, only 13% of Nigerians have records with credit bureaus, limiting lenders’ ability to extend loans. CREDICORP and the Central Bank are working on new legislation to strengthen credit reporting and enforcement.
