Busayo Olanipekun: Expanding responsible retail credit access in Nigeria

Busayo Olanipekun is a seasoned credit professional with extensive experience in banking and financial risk management. He began his career at First Bank of Nigeria Limited as a FirstContact Consultant, where he handled customer enquiries and complaints, before moving into Credit Risk Management, gaining hands-on experience in credit administration, monitoring, and portfolio oversight across assets valued at about N3 trillion. An Associate member of the Institute of Chartered Accountants of Nigeria, he currently serves as Senior Credit Analyst at Sage Grey Finance Limited, bringing a strong eye for detail and disciplined approach to credit analysis. In this interview with CHISOM MICHAEL, he discusses retail loan accessibility in Nigeria, credit risk assessment standards, collateral considerations, approval processes, digital lending channels, employer-backed schemes, and the broader economic factors shaping responsible and sustainable retail credit growth.

From your experience, how accessible are retail loans to the average customer in Nigeria today?

Retail lending has improved significantly for salaried individuals, largely driven by fintech platforms, digital onboarding and faster approvals. Many personal loans are now processed within hours. However, access remains more constrained for MSMEs due to collateral requirements, documentation gaps and limited credit history. Structured intervention programmes such as the FGN MSMEs Fund, administered by Sage Grey Finance in collaboration with the Bank of Industry, help bridge this gap by offering concessional rates and simplified processes. While progress has been made, deeper reforms are still needed to fully support MSMEs.

What core requirements must a retail borrower meet before a credit facility is considered?

Core requirements typically include proper KYC documentation, verifiable income or business cash flow, a satisfactory credit history and clarity of loan purpose. Credit decisions are guided by the “5 Cs of Credit”, which are Character, Capacity, Capital, Collateral and Conditions. Even where collateral is not mandatory, repayment capacity and behavioural history remain central. Responsible lending balances access with disciplined risk management.

How significant is collateral in retail lending, and how does it influence credit decisions?

Collateral remains an important component of retail lending, especially for business-related credit. In a context of economic volatility and regulatory risk, lenders often regard collateral as a secondary source of repayment in the event of default, providing additional security beyond the borrower’s cash flow or income. The presence and quality of collateral can significantly influence key aspects of the credit decision, including the loan amount, interest rate, tenor and the likelihood of approval. During periods of economic uncertainty, lenders typically increase the emphasis on collateral, tightening requirements to mitigate risk. At the same time, well-structured intervention programmes like what we offer help to balance the need for security with practical accessibility so that viable businesses can still obtain financing without excessive collateral demands.

Could you walk us through the typical approval process for a retail loan application?

It begins when the customer submits a loan application along with supporting documentation such as identification, bank statements and financial records. These documents are used to evaluate the borrower’s cash flow and overall financial capacity.

Next, a credit check is conducted to examine the borrower’s previous borrowing behaviour and repayment history. For business or MSME loans, the lender also evaluates the purpose of the loan, the viability of the business model and whether an equity contribution may be required. Collateral is then assessed where applicable, providing additional security for the facility. Simultaneously, an analysis of the borrower’s industry and broader market risks is carried out to ensure the business environment aligns with the lender’s risk appetite.

Based on these assessments, if the borrower meets the institution’s credit criteria, the loan proceeds to approval and documentation, after which funds are disbursed. Where the borrower does not meet the required thresholds, the application may either be declined or restructured to mitigate risk.

In practical terms, how can individuals access different forms of credit facilities across the financial system?

Access starts with building a credible financial footprint. This includes maintaining bankable cash flow, operating formal accounts, ensuring accurate documentation and maintaining a clean credit record. Different lenders serve different market segments for example, commercial banks, microfinance banks, fintech platforms, cooperative societies and development finance channels all offer varying products. The key for borrowers is to align their needs with the right funding source and maintain disciplined repayment behaviour to strengthen future eligibility.

How do traditional banks and credit unions compare with fintech lenders in terms of access and turnaround time?

Fintech lenders generally provide faster turnaround times due to automated credit scoring models and digital onboarding processes, often without strict collateral requirements. On the other hand, traditional banks apply more rigorous assessments, which may take longer but support larger ticket sizes and stronger risk controls. Both models however, play complementary roles in the ecosystem.

What role do digital channels such as mobile apps and USSD platforms play in expanding credit inclusion?

Digital platforms have significantly reduced access barriers. Mobile apps and USSD channels allow customers to apply remotely, while transaction data and behavioural analytics support credit assessment. Digital footprints are increasingly being used to support credit assessment, thereby improving inclusion, especially among younger and previously underserved populations

How effective are point-of-sale and buy now, pay later models in supporting retail consumption?

Point-of-sale systems enhance payment efficiency and improve merchant sales cycles. Buy Now, Pay Later (BNPL) models have also supported retail consumption by allowing customers to spread payments over time. However, while these models stimulate consumption, sustainability depends on responsible underwriting and borrower discipline to prevent over-indebtedness.

To what extent do employer-backed loan schemes reduce default risk and improve access for salaried workers?

Employer-backed loan schemes play a significant role in reducing default risk and expanding access to credit for salaried employees. Where an employer commits to remit salaries through a particular financial institution, it creates a structured and predictable repayment channel. This makes it easier for lenders to extend personal loans, as repayments can be deducted directly from salary at source. In some cases, employers also provide additional comfort through cash-backed arrangements or formal remittance undertakings. These structures materially reduce credit risk because repayment is tied to verified income and administered through controlled deduction mechanisms. As a result, lenders are able to assess risk more confidently and accurately.

How do current economic indices shape the risk appetite of lenders when assessing retail credit requests?

Macroeconomic indicators such as inflation, interest rates, exchange rate volatility, and GDP performance directly affect lending behaviour. When rates rise and inflation increases, lenders become more conservative, tightening criteria, increasing pricing, shortening tenors and prioritising secured lending. In this instance, demand for loans may decline because customers are more cautious about taking on expensive debt. During stable periods, credit expansion becomes more flexible as lenders are generally more confident in extending credit.

In periods of economic pressure, what shifts occur in collateral requirements and lending thresholds?

During periods of economic pressure, lenders typically adopt a more cautious and defensive posture in order to protect asset quality and preserve portfolio stability. One of the most immediate shifts is a tightening of underwriting standards. In this case, financial institutions often increase collateral coverage requirements, ensuring that facilities are adequately secured and, in many cases, fully collateralised. Appetite for unsecured or “clean” lending reduces significantly, particularly for higher-risk customer segments. Lenders also become more selective about sector exposure, sometimes placing temporary limits on lending to industries that are particularly vulnerable to economic shocks. Cash flow validation becomes more stringent, with closer scrutiny of financial records, revenue sustainability and repayment buffers. Lending thresholds may be adjusted downward, with smaller ticket sizes, shorter tenors and stricter eligibility criteria. The overall objective during these cycles is clear: to manage downside risk, safeguard capital and maintain portfolio quality until macroeconomic conditions stabilise.

What common challenges do retail customers face when attempting to secure business support loans?

Common challenges include insufficient collateral, incomplete documentation, informal financial records, limited credit history and high interest rates. To address these gaps, programmes that combine financing with advisory and capacity-building support have proven particularly effective. For example, structured SME programmes such as those offered by Sage Grey Finance help improve borrower readiness by supporting better documentation, stronger business models and improved financial discipline, ultimately increasing access to sustainable financing.

How can lenders balance wider accessibility with responsible credit risk management?

Lenders can balance wider access with responsible credit risk management by combining efficiency with discipline. Faster processes and simplified onboarding are important, especially for retail and SME customers, but credit quality must remain non-negotiable. Strong underwriting supported by technology, credit bureau data, alternative scoring models and cash flow–based assessments helps expand access without weakening standards. Ongoing portfolio monitoring is equally critical, enabling early intervention where risks emerge. In addition, borrower education and advisory support improve repayment behaviour and long-term asset quality.

What behavioural or financial indicators do you consider most reliable when evaluating a retail borrower’s capacity to repay?

Credit bureau history is highly reliable, as it reflects repayment behaviour over time. Consistent cash flow, account turnover trends, income stability and savings discipline are also strong indicators. Behavioural consistency often proves more predictive than isolated financial figures.

Looking ahead, what reforms or innovations could strengthen fair and sustainable access to retail lending in Nigeria?

Key reforms include broader use of movable asset registries, improved credit reporting coverage, wider adoption of alternative credit scoring models and increased availability of concessional funding. Stronger borrower education is equally important. A combination of regulatory innovation, institutional discipline and financial literacy will be essential for sustainable financial inclusion.