Setting Up Credit Bureaus in Nigeria to Drive Financial Inclusion

January 5, 2021

Credit Bureaus are crucial in a country’s financial framework,  as having them present leads to many opportunities for both the citizenry as well as the country as an entity. Most advanced countries have long established national and privately run credit bureaus .eg. We see in the Netherlands the existence of a national credit bureau,  Australia has four different credit bureaus, and India uses Credit Bureau Information India (CIBIL). These countries prioritize financial inclusion high on their national development agendas, and having advanced credit bureaus are considered critical components of their monetary policies.

Financial inclusion is about availability and equality of opportunities to access financial services. Today, traditional branch banking still leads in the financial inclusion sweepstakes surpassing Mobile money and Nonbank Financial Institutions (NBFIs). Credit bureaus act as information brokers. Bureaus sell their services to banks, mortgage lenders, credit card companies, and other businesses that grant credit. 

The formal definition of a credit bureau is an entity created to track prospective borrowers' credit history, and generate credit reports and credit scores. It is an entity that collects and shares information about creditworthy individuals and businesses. It keeps a database of borrowers, provides central storage for all information, eliminates discrepancies, allows access to credit, and many more.

Lack of financial inclusion brings about many problems in developing countries including:

Financial illiteracy – Without financial inclusion in a country, citizens of the said country won't be privy to financial information, leaving them significantly less savvy in economic matters. Citizens should be able to make financial decisions and select financial products that best fit their situation.

Lack of capital for up and coming businesses – Most MSMEs need loans to support and fuel their businesses, but doing this is deemed impossible without financial support/access.

Increase in the poverty rate – Without financial credits to help poor people out of poverty, they end up going below the poverty line, which increases the percentage of poverty in Nigeria.

The 2017 Reporting Act

This Act was regulated by the Central Bank Of Nigeria (CBN) 's Guidelines for the Licensing, Operations, and Regulation of Credit Bureau in Nigeria of October 2008. The Act gives the CBN all rights for the setting up of general robust operation systems, reporting, and credit information gathering. 

Some of the aims of the Act include;

• Facilitating and promoting access to credit and enhancing risk management in credit transactions.

• Promote fair credit reporting systems.

• Facilitate credit information sharing.

• Set standards for the establishment, regulation, and operations of credit bureau, amongst many others

Credit Bureaus and Financial Inclusion in Nigeria.

Most economies, especially developing economies like Nigeria, need an established Credit Reporting System to help businesses and citizens. Developing Credit bureaus boosts financial inclusiveness in said country, as it is open to everyone, making every citizen liable for credit options. Nigeria is a business-oriented economy with over 37 million micro, small, and medium-sized companies (MSMEs), contributing up to 47% of Nigeria's GDP. The MSMEs employs over 60 million people, and only 2% of citizens have access to credit options (source Nigerian Guardian Business Section).

This gap between those who wish to gain credit and those who actually have access to such credit is very wide, as over 97% of people in the country have zero credit opportunities, with Nigerian loan granting banks almost exclusively offering credit facilities to the public sector and corporate organizations. Individuals, especially those belonging to the micro, small, and medium-sized companies (MSMEs), are left to fend independently without access to credit options. Credit Bureaus comes into play as Credit Bureaus grants credit to individuals and organizations.

Financial inclusion enables poverty reduction and inequality elimination, and that is what the Credit Bureaus in Nigeria aim to achieve. It allows individuals and organizations to have access to business opportunities, education, insurance, and so many more. The gap between the rich and poor in Nigeria is amongst the highest in the world as measured by the Gini coefficient. The National Bureau Of Statistics (NBS) released a report in 2019, which highlights that 40% of the overall population. That means about 83 million people live below the poverty line of NGN 137,430 ($381.75) every year. Our view is that increasing options to gain credit options is a way of bridging the widened gap. 

There are three credit bureaus licensed in Nigeria;

A. CRC Credits Bureau Limited.

B. CR Services credit Bureau PLC and,

C. XDS Credit Bureau Limited. 

These three bureaus have an average of 25 million records of credit data from organizations all around the country. From commercial banks, mortgage banks to leasing companies. 

The creation of private credit Bureaus in Nigeria is expected to bring about financial inclusivity and also boost GDP. Individuals would be able to access loans to get out of poverty, which would reduce the gap between the rich and the poor in the country.


With everything discussed, Credit options remain few and unassessed by numerous Nigerians in the country, especially women, rural citizens, and MSMEs. These parts have a significant factor in the countries' economies as MSMEs and rural citizens – mostly farmers – add to GDP. If the government in Nigeria focuses its assets on MSMEs in the country, its economy can skyrocket and see an attendant reduction in the national poverty rate. 

Send more than money.