Lending to Nigeria’s SMEs Is Hard. Nomba Thinks There’s a Better Way

Why It Matters

By proving that data‑driven, low‑collateral lending can achieve sub‑1 % NPL rates, Nomba offers a scalable blueprint for unlocking credit to Nigeria’s underserved SMEs, a sector critical for economic growth.

Key Takeaways

• Nomba disbursed ₦21.3bn (~$26.6m) in 18 months.
• NPL ratio stayed under 1%, outperforming traditional banks.
• Loans based on real‑time payment data, not audited statements.
• Borrowers must commit 30% cash or alternative collateral.
• Goal to expand loan book to $500bn with institutional partners.

Pulse Analysis

Nigeria’s small‑and‑medium enterprise (SME) sector has long struggled with credit access, as banks demand extensive documentation and hard collateral that many firms cannot provide. This bottleneck stifles productivity and limits the country’s growth potential. Fintechs like Nomba are reshaping the landscape by leveraging the digital footprints of businesses—specifically, real‑time payment flows captured on their platforms—to assess creditworthiness. By bypassing conventional financial statements, they reduce underwriting time and open financing to a broader slice of the market, while still maintaining rigorous risk controls.

The early results from Nomba’s partnership with Globus Bank underscore the viability of this approach. Deploying roughly $26.6 million in loans, the fintech kept its non‑performing loan (NPL) ratio under 1 %, a stark contrast to the higher default rates typical of traditional Nigerian banking. Flexible collateral options, including a 30 % cash commitment, stablecoins, equity stakes, or physical assets, further lower entry barriers for borrowers. This model not only improves loan recovery—by aligning repayment incentives with real cash flow visibility—but also demonstrates that disciplined, data‑driven underwriting can sustain low default levels even in a high‑risk environment.

Looking ahead, Nomba’s ambition to scale its loan portfolio to $500 billion will test the durability of its methodology. Partnering with commercial banks and development finance institutions could provide the capital depth needed for such expansion, especially in high‑impact sectors like logistics, manufacturing, and healthcare. However, as the borrower base widens, maintaining sub‑1 % NPL performance will hinge on robust monitoring and enforcement mechanisms. If successful, Nomba could set a new standard for SME financing across emerging markets, catalyzing growth and fostering a more inclusive financial ecosystem.