Nigeria has officially launched the National Credit Guarantee Company (NCGC), an initiative designed to expand access to credit for the country’s struggling micro, small, and medium enterprises (MSMEs). With a startup capital of ₦100 billion, the company aims to provide up to 60% guarantees on loans disbursed by commercial banks, microfinance institutions, and fintech platforms.

Vice President Kashim Shettima inaugurated the NCGC board during a two-day event at the Presidential Villa in Abuja from July 3–4, 2025. With its operations now underway, the NCGC positions itself as a vital intervention in reversing the widespread collapse of Nigerian MSMEs and promoting inclusive economic growth.

A Bold Mandate Amid Deepening Business Failures

The company’s mission is straightforward but ambitious—catalyse lending to Nigeria’s underserved MSME sector by de-risking loans for financial institutions. By offering partial loan guarantees, NCGC seeks to remove the biggest hurdle most small businesses face: lack of collateral and lender confidence.

Its target beneficiaries span a wide range of enterprise groups, including:

• Youth-led startups

• Women-owned businesses

• Micro and small-scale entrepreneurs

• Exporters and manufacturers

• Operators in the solar energy and tech space

Through this broad coverage, the NCGC is expected to drive job creation, expand financial inclusion, and foster sustainable development across Nigeria’s fragile economy.

7.2 Million MSMEs Lost: A Grim Backdrop

The scale of business collapse in recent years paints a sobering picture. Data from the Nigerian Economic Summit Group (NESG) shows that 30% of Nigeria’s 24 million MSMEs—approximately 7.2 million enterprises—shut down between 2023 and 2024. This accounted for a ₦94 trillion loss to the economy.

Additionally, since 2017, the country has witnessed the closure of about 1.9 million businesses. MSMEs, which make up the backbone of the Nigerian economy, have been hit by a barrage of structural and macroeconomic challenges including:

• Poor infrastructure

• Policy instability

• Security concerns

• Currency depreciation

• Rising inflation

• High energy costs

• Multiple taxation

More than 83.9% of MSMEs surveyed reported that inflation had severely disrupted their operations. The sharp fall in consumer purchasing power, spurred by subsidy removals and naira instability, has further weakened business viability.

A History of Failed Interventions

Nigeria has a long track record of unsuccessful credit schemes targeting MSMEs. For example:

• The CBN’s 2010 Credit Guarantee Scheme promised 80% coverage but struggled due to complicated procedures and low bank interest.

• The Small and Medium Enterprises Equity Investment Scheme (2001) required banks to invest 10% of profits into SMEs, but compliance and impact were minimal.

• Trillions of naira in CBN intervention funds have been disbursed over the years, yet less than 20% reached intended beneficiaries—due to bureaucracy, corruption, and mismanagement.

In many cases, political interference, poor transparency, and poor SME preparedness caused the collapse of these programmes. Post-bank consolidation, SME lending dropped significantly due to high risk aversion among financial institutions.

NCGC Must Do Things Differently

To avoid repeating these mistakes, the NCGC must offer:

• Simple, digital-friendly application processes

• Minimal collateral requirements

• Widespread awareness campaigns in local languages

• Partnerships with microfinance banks, fintechs, and cooperatives

Critically, it must operate with full transparency, including:

• Quarterly reports on performance

• Independent oversight

• Default rate tracking

• Audit-backed accountability

Beyond guarantees, NCGC must also tackle non-financial barriers:

• Business advisory support

• Training in financial literacy and digital tools

• Access to markets and technology

• Security and infrastructure improvements

Guarantee Coverage Must Be Enough to Incentivise Lending

The key to NCGC’s success lies in convincing risk-averse lenders that MSME loans are worth the gamble. A 60% credit guarantee could help, but banks need confidence in loan recovery systems, clarity in eligibility rules, and supportive legal frameworks for enforcement.

Collaboration between banks, government regulators, and the NCGC is vital to coordinating effective implementation. If properly managed, the programme could significantly boost the survival rate of SMEs in the critical first five years of business.

Policy Support Is Non-Negotiable

However, access to credit alone will not fix the MSME sector. The government must confront the larger structural issues:

• Fixing electricity supply and bad roads

• Tackling insecurity across states

• Reining in inflation and naira depreciation

• Streamlining taxation and business registration

Likewise, regulatory clarity, especially from state and local government agencies, will help reduce red tape and foster a stable business environment. The government should treat the NCGC as a national economic reform tool, not just another policy pronouncement.

A Call to Action: Don’t Repeat the Past

The NCGC must not become another bureaucratic entity with lofty ideals but no results. Instead, it should be a nimble, transparent, and results-oriented body capable of adapting to Nigeria’s rapidly changing economic realities.

To succeed, the programme must show early impact—not just in terms of guarantees issued, but in actual SME survival, job creation, and economic growth. Its legacy must be measured in recovered businesses, new enterprises, and thriving local economies.

Conclusion

With the right political will, stakeholder alignment, and operational efficiency, the National Credit Guarantee Company could be the most significant intervention yet for Nigeria’s MSME sector. But its success will hinge not only on capital injection but on removing long-standing systemic barriers and empowering real entrepreneurs, not just political allies.

The federal government must act swiftly, not just with policy—but with implementation, accountability, and bold reforms that ensure every naira invested translates to real economic transformation.

If the NCGC can deliver, Nigeria’s entrepreneurs will not only survive but thrive—taking the economy with them.