YouthCred Credit Scheme Faces Questions Over Risk, Scoring, ₦47bn Claims
Quick Reads
- The Federal Government launched YouthCred for Entrepreneurs in Abuja on Wednesday, targeting 500,000 young business owners.
- Loans of ₦200,000 to ₦2 million require no collateral, based instead on cash flow and repayment behaviour.
- CREDICORP does not lend directly; it guarantees and funds loans issued through Partner Financial Institutions, who likely carry frontline default exposure.
- Vanguard reported ₦7 billion disbursed to date; five other outlets, including Legit.ng, put the figure at ₦47 billion.
- Applicants must pass a mandatory digital credit literacy course before the portal unlocks loan access.
The Federal Government launched the YouthCred credit scheme on Wednesday. It offers collateral-free loans of ₦200,000 to ₦2 million to Nigerians aged 18 to 39. The programme began as a pilot for serving corps members. It now aims to reach 500,000 beneficiaries this year.
Finance Minister Taiwo Oyedele said the scheme will help build a “credit-driven economy.” He said CREDICORP will assess applicants using financial behaviour and business cash flow instead of collateral.
However, several questions remain unanswered.
Nigerian Consumer Credit Corporation, CREDICORP targets artisans, ride-hailing drivers and small business owners with limited formal credit histories. However, CREDICORP and the Finance Ministry have not explained how they will assess these applicants. Nigeria’s credit bureaus still rely heavily on formal banking data.
Questions also surround loan defaults. Partner financial institutions will issue the loans, while CREDICORP provides funding and support. Reports indicate the National Credit Guarantee Company will provide only partial guarantees, leaving the exact loss-sharing arrangement unclear.
There is also confusion over the programme’s performance figures. While Vanguard reported that ₦7 billion had been disbursed to more than 301,000 Nigerians, several other outlets including NAN, The Nation and Legit.ng, as well as CREDICORP’s own July 28 statement, put the figure at over ₦47 billion for the same number of beneficiaries.
Applicants must also complete a mandatory online credit literacy course and provide their BVN and NIN before accessing the loans, raising questions about digital accessibility for some young Nigerians.
CREDICORP plans to expand the scheme to one million beneficiaries this year, but how it addresses these unresolved issues could determine its long-term success.
