Lagos: For millions of Nigerians who earn, trade, and receive payments digitally but struggle to access formal loans, Nigeria’s virtual asset reforms could offer a new route to credit. Experts say digital transaction records could increasingly serve as an alternative source of credit information, helping banks and other lenders assess people and businesses that lack conventional collateral or extensive banking histories.
According to News Agency of Nigeria, Prof. Chris Onalo, Registrar and Chief Executive Officer of the National Institute of Credit Administration (NICA), said the reforms could help transform digital financial activity into useful credit information. ‘Credit data is what the credit granting community needs to have an effective credit scoring system,’ Onalo stated. He noted that wallet histories, stablecoin receipts, and peer-to-peer transaction records could provide lenders with insights into the financial behavior of young Nigerians, MSMEs, freelancers, and other underserved groups. Such information, when properly regulated and integrated with existing credit systems, could help lenders move beyond traditional requirements like land and other physical collateral.
The development follows Nigeria’s move to establish a more coordinated framework for virtual assets. President Bola Tinubu signed the Presidential Executive Order on Virtual Asset Coordination, 2026, on July 17, while the Nigeria Revenue Service (NRS) subsequently issued administrative tax guidelines covering cryptocurrencies and other virtual assets. The reforms also provide for a Virtual Asset Council, chaired by the Central Bank of Nigeria (CBN), to strengthen coordination among relevant regulatory agencies. Meanwhile, the CBN opened applications on August 12 for the second cohort of its regulatory sandbox programme, providing a controlled environment for fintechs, financial institutions, and technology providers to test innovative products and business models under regulatory supervision.
For Onalo, the significance of the reforms goes beyond regulating cryptocurrencies. He said they could help create a more reliable digital financial ecosystem in which transaction history becomes part of the information used to determine creditworthiness. ‘Digital transactions can generate data that can help lenders understand the financial behavior of borrowers,’ he said. Onalo emphasized that increased use of systems linked to the Bank Verification Number (BVN), National Identification Number (NIN), and other identity platforms could further strengthen the quality of digital credit information, benefiting young Nigerians and small businesses economically active but excluded from conventional credit channels.
The NICA boss also identified remittances and cross-border payments as areas where virtual assets could support economic activity. He said freelancers, entrepreneurs, and small businesses serving international customers could benefit from faster and more accessible digital payment channels. However, Onalo cautioned that the benefits would heavily depend on the implementation of the reforms. Excessive compliance requirements, high costs, and rigid regulations could push legitimate participants toward offshore platforms and less regulated peer-to-peer channels. He advocated tiered licensing for virtual asset service providers, clear standards for digital collateral, and integration of relevant virtual asset data into credit bureaus.
Dr. Olayinka Odutola, Chief Executive Officer, Association of Enterprise Risk Management Professionals, agreed that digital transactions could become an important source of financial information. ‘Digital transactions can evolve into financial data, then credit intelligence, responsible lending, and greater financial inclusion,’ Odutola said. He stressed that greater access to digital credit would not automatically lead to financial inclusion. Effective data protection, credit reporting, digital identity, consumer protection, and responsible lending frameworks must accompany the reforms.
Odutola warned that regulation must not become so restrictive that legitimate businesses are forced outside the formal system. ‘Good regulation should provide both protection and room for innovation,’ he said. Odutola suggested that Nigeria develop a risk-based framework before banks and institutional investors provide significant financing to virtual asset businesses. Lenders should assess licensing status, ownership, governance, financial strength, liquidity, cybersecurity, and customer asset protection, along with the volatility of digital assets before accepting them as collateral.
The experts’ views indicate a potentially significant shift in Nigeria’s credit landscape, moving from digital activity to formal credit. For years, lack of collateral, inadequate documentation, and limited credit histories have restricted access to formal financing for many individuals and small businesses. The expansion of regulated digital financial activity could provide lenders with additional information to evaluate borrowers. However, the objective should not simply be to increase digital borrowing, but to ensure access to financial services that are appropriate, affordable, sustainable, and responsible.
Odutola pointed out that expanding digital credit without proper risk assessment, consumer protection, and financial literacy could leave vulnerable borrowers over-indebted. Nigeria now has an opportunity to move from fragmented virtual asset activities toward a coordinated digital financial ecosystem. If properly implemented, the reforms could support payments, remittances, SME financing, alternative credit assessment, tokenization, and cross-border financial services. The challenge is to create a regulatory environment that protects consumers and financial stability without stifling innovation, ensuring that ‘innovation must not outrun risk management.’
For Nigeria’s young entrepreneurs, MSMEs, and millions of digitally active but underserved citizens, the success of the reforms could ultimately be measured by whether digital participation translates into access to affordable, responsible, and sustainable credit.