Nigerians overpaying for loans as banks hoard credit data, fintech founder alleges

Millions of Nigerians may be paying more than necessary for loans because banks and other lenders keep valuable customer credit information to themselves, according to Winston Osuchukwu, founder and chief executive officer of Mathesis Analytics.

Osuchukwu made the claim in a new paper, where he argued that the country’s current credit assessment system is unfair to borrowers and contributes to high lending costs.

According to him, lenders often price loans based only on information they have collected directly from customers, rather than considering a person’s complete financial history across multiple institutions.

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This means that a Nigerian who has consistently repaid loans, saved money through fintech platforms, or maintained good financial habits may still be treated as a high-risk borrower when approaching a new lender.

“As a result, borrowers are often charged higher interest rates, not because they are risky, but because their financial behaviour is not fully visible,” Osuchukwu said.

Information gap raising cost of credit

The development comes at a time when Nigerians and businesses are struggling with high borrowing costs amid inflationary pressures and tight economic conditions.

Industry experts have long identified information asymmetry, the lack of complete information between lenders and borrowers, as one of the biggest challenges facing Nigeria’s credit market.

Osuchukwu argued that although the Credit Reporting Act and the Central Bank of Nigeria’s credit bureau framework were created to encourage information sharing, implementation remains weak.

According to him, financial institutions are more likely to report negative customer information than positive behavioural data such as consistent loan repayments and savings patterns.

This creates a situation where many borrowers effectively start from scratch whenever they seek credit from a new institution.

“The borrower is priced as risky because their risk has not been properly measured,” he said.

Challenging traditional lending models

The fintech entrepreneur is proposing a new framework called ‘Personal Equity’, which seeks to create a portable financial identity for individuals.

Under the model, a person’s financial activities across banks, fintech platforms, lending companies, telecom operators, utility providers and other institutions would be combined into a single measure of creditworthiness.

He described Personal Equity as a financial asset that belongs to the individual rather than the institutions collecting the data.

The proposal aligns with the provisions of Nigeria’s data protection framework, particularly the Nigeria Data Protection Act (NDPA) 2023, which gives individuals greater rights over their personal data.

According to Osuchukwu, financial behaviour data is generated by customers and should be capable of working in their favour regardless of where they choose to seek financial services.

Fintech infrastructure already processing millions

To support the concept, Mathesis Analytics says it has built technology infrastructure capable of aggregating financial behaviour across multiple sources.

The company integrates with banking systems and combines traditional financial records with alternative data such as telecom usage, utility payments and other indicators of financial behaviour.

The approach is particularly important in Nigeria, where millions of people remain underbanked and may not have extensive banking records despite demonstrating responsible financial habits.

Mathesis disclosed that it has already scored more than 40 million Nigerians and facilitated over $272 million in credit disbursements through institutions using its platform.

Implications for financial inclusion

The proposal arrives as the Central Bank of Nigeria intensifies efforts to deepen financial inclusion and implement open banking initiatives designed to give consumers greater control over their financial data.

Analysts say one of the biggest barriers to expanding access to credit in Nigeria is the inability of lenders to accurately assess risk, especially for first-time borrowers and people operating largely outside the formal banking system.

By creating a broader picture of financial behaviour, Personal Equity could potentially help lenders identify more creditworthy customers while reducing the need to charge high risk premiums.

For borrowers, this could mean easier access to loans and potentially lower borrowing costs.

For lenders, it could improve loan performance by enabling more accurate risk assessment.

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A debate on data ownership

Beyond lending, the proposal raises broader questions about data ownership in Nigeria’s growing digital economy.

As banks, fintechs and telecom companies gather increasing amounts of customer information, policymakers are facing growing pressure to determine how that data can be used while protecting consumer rights.

Osuchukwu believes the next phase of Nigeria’s financial evolution will depend on shifting from institution-controlled credit information to consumer-owned financial identities.

“The data exists. The technology exists. What remains is the collective will to deploy it,” he said.

If adopted widely, the model could reshape how credit is priced in Nigeria and challenge long-standing practices that many believe have kept millions of financially responsible Nigerians paying more for loans than they should.