Every few years, a new piece of financial infrastructure arrives with a long list of things it could do. Open banking is no different. The framework the CBN has been building since 2021 will enable a range of services that depend on secure, consented access to financial data. But adoption is never driven by a list of possibilities. It is driven by the one problem painful enough that people are willing to try something new to solve it. In the UK, that problem was account visibility . In India, it was credit. In Nigeria, it will almost certainly be credit too, and the evidence for this is not theoretical. It is sitting in the gap between what Nigerians need and what the financial system currently allows them to access.
The size of the problem
One in four Nigerians has a credit requirement at any given time, usually driven by the need to cover daily expenses: groceries, school fees, medical emergencies, rent that came due before payday. And when this need arises, nearly nine out of ten of those people end up borrowing from family and friends because the formal alternatives either do not exist or do not work for them. Nigeria’s borrowing rate from commercial lenders sits at about 34 per 1,000 people. In Kenya, that number is 373. In Namibia, 338. These are not countries with vastly superior financial infrastructure. They simply have credit systems that reach further down.
Out of 73 million Nigerians who earn income through formal or informal channels, an estimated 83% have no access to credit. Salaried workers, business owners, traders, freelancers, people with consistent income but no formal route to borrow against it. The institutions that should be bridging this gap are not structured to do so. Nigerian banks collectively hold 65% of the country’s loan portfolio, yet only 8% of their lending is focused on individual consumers. Banks lend with some confidence to their own account holders because they can see salary deposits and spending patterns inside their systems. Beyond that perimeter, the data they would need to assess a new borrower does not exist in any structured or accessible form. So they hold back. The gap gets filled instead by digital lenders and loan apps, many of which face the same data problem but respond to it differently.
Some lenders have built sophisticated alternative scoring models and are genuinely trying to serve underbanked Nigerians responsibly. But a significant portion of the market still compensates for poor borrower visibility with high interest rates to absorb expected defaults, and invasive phone permissions that harvest contacts, SMS logs, and call history as crude proxies for creditworthiness. And when borrowers fall behind, some of these apps have used the contact lists they collected to send fabricated, defamatory messages to the borrower’s family, colleagues, and friends. This is what lending looks like when the underlying infrastructure cannot tell lenders who they are lending to. The cost of that blindness gets absorbed by borrowers in the form of predatory terms, and by lenders in the form of high default rates. Both sides lose, and the people who need credit the most remain locked out entirely.
Why credit is the use case that will pull people in
When people adopt a new financial system, they do not adopt it because the technology is impressive or the use cases are numerous. They adopt it because it solves a problem that hurts deeply.
The UK’s open banking ecosystem reached over 15 million active users by mid-2025. Account information services initially pulled consumers in. Consumers could connect their bank accounts to budgeting apps, credit tools, and personal finance platforms that could finally see across multiple accounts. That data-sharing layer still accounts for roughly four out of every five API calls in the system. Payments grew to become the fastest-growing use case in 2023, as account-to-account transfers proved faster and cheaper than card payments. Notably, the UK already had a mature consumer credit market. Access to loans was not the burning problem.
India tells a different story, one closer to our reality. India’s Account Aggregator framework was launched in 2021. By late 2024, 120 million accounts had been linked, and over $10 billion in loans had been disbursed through the system. When researchers asked Indian consumers what would make them willing to share their financial data through the framework, 71% said better loan offers. The single largest motivator for data sharing was the prospect of accessing credit.
The structural parallel with Nigeria is hard to miss. Both countries have large populations with thin or nonexistent credit histories. Both have banking systems where lenders cannot confidently assess borrowers outside their existing customer base. Both have enormous gaps between credit demand and credit supply. And in India, when open banking gave lenders a reliable, consented window into borrowers’ real financial lives, credit became the engine of adoption.
Nigeria’s version of this gap is wider. Our lending infrastructure is less developed. The pain of not being able to access credit is more frequent and more broadly felt across the population. When open banking gives a lender the ability to see a borrower’s actual income patterns, spending consistency, and financial obligations directly from the source, and when the borrower can grant that access through a regulated consent process rather than handing over their entire phone, the terms of the relationship between lenders and borrowers in this country change.
What that change actually looks like
The lending experience for many Nigerians today still involves some version of this: you approach a lender, provide limited documentation, and wait for a decision based on an incomplete picture of who you are financially. The lender works with what they have. If the data is thin, they either price the uncertainty into the interest rate, reduce the loan amount, or decline altogether. The borrower has little ability to improve the outcome because they cannot easily demonstrate the full scope of their financial life.
Open banking changes the mechanics underneath that interaction. Instead of a lender working with a narrow slice of data from one source, they can, with the borrower’s consent, access transaction history across multiple accounts. Salary deposits, recurring expenses, how money moves between accounts, whether obligations are met consistently. That is a substantially richer picture, and it means someone who earns a steady income but has never taken a formal loan before can become visible to a lender for the first time.
The argument here is not that open banking will flood the market with more loans. It is that it enables better credit. When a lender can see a borrower clearly, the risk calculus changes. Default risk drops because underwriting is based on verified financial data rather than guesswork. Lower risk creates room for lower interest rates over time. Fairer assessments mean that people who were previously invisible to the credit system because they had no formal credit history can finally be evaluated on what they actually do with their money.
And credit does not have to remain a standalone product you go looking for. Open banking infrastructure makes embedded credit possible. A ride-hailing app that identifies you are short by a few thousand naira could extend a micro-credit at the point of need, recovered from your next deposit. A supermarket checkout could offer to split your monthly restock into installments. A healthcare provider could offer a short-term facility tied to your verifiable income so you do not have to choose between treatment and waiting for payday. This is credit at the moment it is needed, inside the services people already use, rather than requiring a separate application process each time. When credit works, it stops being something people scramble for in emergencies and becomes infrastructure that supports everyday economic life. Open banking can make this possible at scale.
The other use cases worth watching
Credit may be what brings most Nigerians into the open banking ecosystem for the first time, but it will not be the only use case that holds them there. Nigeria’s payment rails are more than functional, transfers generally go through, POS terminals are widely available, and USSD reaches people without smartphones, but the friction still exists.
Card payments, which still dominate e-commerce, come with their own set of headaches, cards that expire or get damaged, OTPs that arrive late or not at all, 16-digit card numbers typed out manually and prone to error, transaction fees that add up for both merchants and customers, and the ever-present risk of card fraud that makes many Nigerians hesitant to enter their details online. Open banking introduces an alternative, ‘Pay with Bank’. Instead of relying on cards, a customer pays directly from their bank account through a secure, consent-based connection. This offers lower processing costs for businesses, and because the payment is initiated through the bank’s own authentication, the fraud surface shrinks considerably.
Beyond one-off payments, open banking also enables variable recurring payments, where a customer authorizes a merchant to collect payments that can vary in amount within agreed limits, useful for subscriptions, utility bills, and instalment plans where the amount changes from month to month. For businesses dealing with failed card transactions and abandoned checkouts, and for customers tired of the friction that sits between wanting to pay and actually paying, this use case represents a real step forward.
The use case that will matter most
People adopt new financial infrastructure when the reward justifies the effort of trusting something unfamiliar. In Nigeria, where financial trust has been earned slowly and lost quickly, the reward has to be concrete. Access to credit, real credit that is fairly assessed and available when you actually need it, solves a problem that the majority of working Nigerians deal with repeatedly. It is the use case most closely connected to our survival.
Nigeria already has lenders willing to give credit. It also has millions of people earning income who the credit system still struggles to fully see. What has been missing is a reliable way to connect both sides at scale. Open banking does not solve credit on its own, but it provides the infrastructure that makes better decisions possible
