Unlocking Nigeria’s Lending Potential: How loan recovery firms can boost the economy

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As Nigerians increasingly rely on consumer credit to navigate the harsh economic landscape, the need for a robust loan recovery ecosystem has become paramount. According to Mayowa Anibaba, CEO and co-founder of Mida Technologies, a loan recovery and recollection company, the current system requires a more sophisticated approach to prevent delinquency and primitive collection strategies.

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“Data from the CRC Credit Bureau reveals that over 41 million Nigerians have taken loans from various financial institutions, with over N470 billion disbursed as loans in the last quarter of 2024 alone,” Anibaba said. “As the loan portfolio increases, so does the risk of non-payment. Loan recollection and recovery companies like ours are best equipped to recover delinquent loans.”

The latest Economic Report of the Central Bank of Nigeria shows that total consumer loans stood at N4.12 trillion as of December 2024, with personal loans accounting for N2.39 trillion and retail loans valued at N1.73 trillion. However, the non-performing loans to performing loans ratio has increased, posing a significant risk to the financial system

Anibaba believes that financial institutions should outsource their loan collections and recoveries to specialists, allowing them to focus on their core mandates. “Financial institutions should focus on providing financial services and introducing innovative products to the benefit of numerous customers,” he said.

Adija Uzondinma, chief operating officer and co-founder of Mida Technologies, notes that the company’s approach to loan recovery is driven by technology and empathy. “Incorporating artificial intelligence into our processes has enabled us to unearth algorithms and behavioural patterns that aid in achieving a high level of delinquent loan recoveries,” she said. “However, our main strength lies in our empathetic approach to loan recovery. We engage delinquent debtors to assist them in paying back their loans while reabsorbing them into the financial ecosystem.”

Oke Egbi, Chief Revenue Officer of Mida Technologies, believes that companies like theirs hold the key to unlocking opportunities in Nigeria’s lending ecosystem. “Recovering close to 50 percent of non-performing loans would unlock an immense amount of capital, boosting the country’s economy,” she said. “Improvement in delinquent loan recoveries will further boost the confidence of lenders to increase their lending portfolio in sectors like mortgage and car loans.”

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