CBN’s Steady Hand on Personal Loans: Doing Things Differently, Expecting Different Results, by Rahma Olamide Oladosu
“Insanity is doing the same things over and over and expecting different results”
– Albert Einstein
As someone who has observed Nigeria’s financial terrain for years, I can confidently say that personal loans have become a vital part of survival for many Nigerians. Whether it is paying children’s school fees, covering unexpected medical bills, starting a small business, or simply keeping food on the table, personal loans now serve as financial lifelines. While the system has not always been perfect, the strides taken by the Central Bank of Nigeria (CBN), especially under the leadership of Governor Yemi Cardoso, are truly commendable.
I remember a time not too long ago when taking a personal loan felt like walking into a trap. Many Nigerians were forced to deal with unregulated digital loan apps that offered quick money but demanded steep interest rates. Worse still, when borrowers could not repay on time, they were subjected to humiliating tactics such as calls to their family members or threats via SMS. These practices were not only unethical but deeply traumatic, especially for people who simply needed a short-term financial cushion.
Then came the CBN with bold and intentional reforms that began to change the narrative. The changes may not have been dramatic, but their impact has been significant. One cannot ignore the calm, focused, and reform-driven approach of Governor Cardoso. His leadership has introduced both structure and a human face to central banking in Nigeria.
Over the last decade, personal loans in Nigeria have grown significantly not just in volume but also in relevance. What used to be an exclusive service for salaried workers with formal bank accounts has gradually expanded to include the informal sector, which employs over 80 percent of the population. From ride-hailing drivers to hairdressers and market traders, more Nigerians now rely on small loans to support daily needs and build resilience against financial shocks.
One of the first major moves was the regulatory crackdown on predatory digital lenders. The CBN, in collaboration with other agencies, began enforcing proper licensing for loan providers. This alone helped clean up a significant portion of the digital loan space. By requiring lenders to register with recognised financial bodies, the CBN has dismantled much of the chaos that once plagued the sector. This initiative protects vulnerable borrowers who were often misled by flashy loan apps hiding predatory terms and conditions.
Another breakthrough worth recognising is the introduction of the Global Standing Instruction (GSI) framework. This mechanism allows banks to recover unpaid loans directly from any bank account held by the borrower. It discourages willful default and eliminates the need for harsh or shame-based debt collection tactics. It encourages responsibility and promotes accountability in the borrowing process. More importantly, it signals a shift toward dignity in financial engagements.
Today, more banks and licensed fintech firms are designing personal loan products tailored to real needs, whether short-term emergency loans, salary advances, or support for micro-enterprises. Some even offer repayment structures aligned with the borrower’s income flow. This is a significant improvement from the old, rigid, collateral-based lending systems that excluded millions.
Previously, securing a loan in Nigeria often depended on personal connections rather than financial credibility. That is now changing. Under Governor Cardoso’s leadership, the CBN has taken critical steps to strengthen Nigeria’s credit infrastructure. By supporting the expansion of credit bureaus and encouraging the use of alternative data for credit scoring, more Nigerians, especially those outside traditional banking systems, can now access legitimate credit. These reforms are not just technical fixes; they are transformative for market women, workers, and informal traders who were once invisible to the formal financial system.
Although interest rates remain high due to inflation and currency instability, the CBN’s cautious monetary policy is necessary. While it is easy to criticise high lending costs, expanding credit recklessly without stabilising inflation would do more harm than good. Governor Cardoso and his team have shown discipline by prioritising long-term economic health over short-term popularity. That kind of maturity is rare and deserves recognition.
What is even more impressive is the CBN’s attention to financial inclusion and literacy. The institution is not just improving access to loans; it is empowering Nigerians with the tools to borrow wisely. Educational campaigns on budgeting, interest calculation, and debt management are gaining momentum. These efforts should be further integrated into school curricula and community outreach. A financially informed population will make better decisions, repay loans reliably, and ultimately contribute to a more stable economy.
Governor Cardoso’s leadership style also deserves admiration. In a field often filled with technical jargon and bureaucratic barriers, his calm, clear, and transparent communication has begun to rebuild public trust. Nigerians are starting to feel that the CBN sees them not as statistics but as individuals navigating complex financial realities. Cardoso does not just promise reforms. He delivers them through consistent and credible action.
In a time when trust in public institutions is fragile, the Central Bank of Nigeria is setting a rare and powerful example of what responsible governance can look like. It is acting with clarity, driven by data, and prioritising the welfare of everyday people. As someone passionate about economic justice and empowerment, I find this progress not only encouraging but inspiring.
If this level of purposeful reform continues, personal loans in Nigeria will evolve beyond access to credit. They will represent access to dignity, opportunity, and hope. And for a country like Nigeria, where hope is often elusive, that kind of transformation is nothing short of revolutionary.
Oladosu is a Staff Writer with the Economic Confidential