How Credit Guarantees Can Rescue Nigerians from Ponzi Schemes and Drive MSME Growth
As Nigerians continue to grapple with economic hardship and rising desperation for quick wealth, Ponzi schemes have become a recurring trap, preying on financial illiteracy and false hopes. But there is a credible pathway to wealth creation — and it lies not in get-rich-quick platforms, but in structured credit systems backed by guarantees, according to Prof. Chris Onalo, Registrar/CEO of the National Institute of Credit Administration (NICA).
In an exclusive interview with the News Agency of Nigeria (NAN), Onalo warned that financial desperation, not just greed, is pushing many Nigerians into fraudulent schemes, despite repeated regulatory warnings. He believes the antidote is a strong national credit infrastructure — particularly leveraging the Nigerian Consumer Credit Corporation (CREDICORP) and the National Credit Guarantee Company (NCGC) recently introduced under the Bola Tinubu administration.
“People fall for Ponzi schemes because they don’t see alternatives. But the government has now created one — a credit economy backed by guarantees,” Onalo said.
The NCGC Advantage: Risk-Sharing for Real Sector Growth
At the heart of Nigeria’s new credit economy is the National Credit Guarantee Company (NCGC) — a government-backed entity tasked with de-risking loans to MSMEs and youth-led businesses, especially those lacking collateral.
“This is a game-changer,” Onalo noted. “It means entrepreneurs and small businesses can now be assessed and supported by banks with NCGC sharing the credit risk.”
Credit guarantees have long been used in developed economies to bridge the trust gap between lenders and small borrowers. By absorbing a significant portion of potential loan defaults, NCGC allows banks to lend more boldly and inclusively, unlocking credit access for millions of financially excluded Nigerians.
Why Credit Is Better Than Luck: Building Sustainable Wealth
According to Onalo, credit guarantees provide a sustainable path to wealth — unlike Ponzi schemes which are structured to collapse.
“Every global conglomerate — from Amazon to Dangote — started as a small venture with access to credit. Nigeria’s MSMEs can grow the same way, but only if they are supported by strong, well-regulated financial systems,” he said.
He urged Nigerians to shift their financial mindset from speculative schemes to formal credit tools like consumer credit, guaranteed loans, and structured payment plans.
Value Reorientation: Tackling Nigeria’s Get-Rich-Quick Culture
Onalo also pointed to a deeper societal problem — the “get-rich-quick syndrome” that glamorizes overnight success without value creation. He called for a national reorientation campaign, urging the government to empower the National Orientation Agency (NOA) with adequate funding to educate citizens on legitimate pathways to wealth.
“We need practical, community-level enlightenment campaigns in schools, churches, mosques, markets and town halls — teaching people that financial growth comes from productivity, not gambling,” he said.
Making NCGC Work: Transparency, Innovation, and Stakeholder Buy-In
For the NCGC to deliver on its promise, Onalo emphasized the importance of transparency, public-private collaboration, innovation, and strict adherence to its mandate. He called for a robust engagement strategy that brings together banks, fintechs, regulators, MSMEs, and community influencers.
“This is not just a policy; it’s a movement. If we get it right, we’ll lift millions out of poverty and reduce financial fraud overnight.”
Looking Ahead: NCGC Stakeholders Forum Slated for July 28
As part of its rollout strategy, the National Credit Guarantee Company will host a high-level Stakeholders’ Forum on July 28, 2025, in Lagos, themed:
“Fostering Inclusive Growth Through Credit Guarantees for Youth-Owned Businesses and MSMEs.”
Onalo will speak alongside representatives from banks, regulators, fintechs, and business associations to explore how to scale the impact of credit guarantees in Nigeria’s real economy.
BRANDECONOMY INSIGHT: Why Investors Should Watch Nigeria’s Credit Guarantee Evolution
The rise of NCGC marks a new chapter in Nigeria’s financial inclusion journey. For investors, the emerging credit guarantee framework opens opportunities to fund risk-mitigated MSME portfolios, collaborate on embedded credit fintech solutions, and partner in youth enterprise development.
If successfully implemented, the NCGC could help reduce informal borrowing, collapse predatory lending, and redirect capital flows into productive, income-generating ventures — a win for borrowers, lenders, and the broader economy.
Bottom Line:
Credit guarantees may be the most effective tool Nigeria has to break the cycle of financial fraud and empower real economic growth. With government backing, industry buy-in, and public awareness, the path to safe, inclusive, and scalable lending for MSMEs is finally within reach — offering Nigerians a real alternative to Ponzi promises and financial despair.
