Millions of small business owners and informal-sector borrowers across Nigeria remain difficult for conventional lenders to assess, even when they have a track record of borrowing and repaying money successfully. The obstacle is not necessarily the absence of borrowing activity, but the fact that many of the transactions that would demonstrate how consistently a borrower repays take place outside the formal credit infrastructure used by traditional financial institutions.

Without an established credit file, documented income, collateral, or other conventional records, those borrowers can remain hard to evaluate when they seek credit elsewhere. For lenders, the result is a visibility problem: activity that exists in practice is missing from the records credit decisions are built on.

Commenting on that gap, Moses Obika, Chief Technology Officer at Nigerian lending company Regxta, said repayment data could provide another way of making underserved borrowers more visible to the credit system.

"Many underserved borrowers are not necessarily people who have never borrowed or repaid money," Obika said. "The problem is that much of that repayment history is not visible where traditional lenders can use it. If that history is recorded properly, it could help bring more of them into the credit system."

In his view, borrowers who begin without conventional credit records can still build useful financial histories over time, provided their loans and repayments are consistently documented. That, he argues, would give lenders evidence of how a customer has handled previous credit, instead of forcing them to assess every application with little information about past borrowing behaviour.

Lessons From Regxta's Lending Operation

That perspective is rooted in Obika's work at Regxta, where he has been involved in developing the technology behind a lending operation serving customers who often arrive with limited financial documentation.

Regxta began lending in 2018 as The Bells Dynamic Option before rebranding in 2021. By then, it already had customers, field agents, and an active loan book. Obika joined the company in August of that year as a contract engineer, at a point when much of the lending operation was still managed manually.

" I started at Regxta, there was no app, no web platform, nothing," he said. "The lending was real, the customers were real and the agents were real, but almost nothing was recorded in a way you could trust. Before we could think about credit scoring, we had to be able to see the book."

The absence of a reliable central record was one of the main problems Obika encountered in the role. Without consistent information on loans and repayments, the company also had less usable data on how individual borrowers were performing over time.

Digitising the Loan Book

When Obika became Regxta's chief technology officer in September 2022, he began leading the development of a digital lending platform designed to bring those records into a single system. The platform went live in October 2023.

Nearly three years later, Regxta says more than 100,000 loans have been processed through the system, with 35,000 customers onboarded and cumulative disbursements exceeding ₦10 billion.

According to the company, about 80% of its customers do not have formal identification when they first approach Regxta, while many also lack established credit files, payslips, or conventional collateral. That profile captures the documentation gap at the heart of the problem: financial activity that is real in practice, but absent from the systems traditional lenders rely on when making credit decisions.

The lending process allows new customers to begin with smaller amounts and develop a record through subsequent repayments. Over time, that activity provides more information about how a borrower handles credit.

"Someone may start without a traditional credit file, but every successful repayment adds information about that borrower," Obika said. "The more consistently that information is captured, the less invisible that person becomes when credit decisions have to be made."

A Case for Recognising Repayment Histories

For Obika, the numbers recorded by Regxta over nearly three years are not only a measure of lending volume. They also represent thousands of borrowers generating repayment histories that did not previously exist in a form that could be easily assessed.

He further argues that if lenders are able to work with reliable repayment records, borrowers without conventional credit files could have another way of demonstrating how they manage credit. That could be especially important for informal-sector workers and micro-business owners, whose financial activity may not produce the documents traditionally used in lending decisions.

Rather than relying only on formal employment records, collateral, or an existing credit file, lenders could also consider a documented history of borrowing and repayment when assessing customers. For borrowers who have repeatedly repaid loans successfully, Obika maintained that such records could reduce the likelihood of having to begin from zero each time they approach a new lender.

"If someone has consistently borrowed and repaid, that history should count for something," he said. "Repayment data could help more underserved borrowers build a record that the wider credit system can recognise."

Whether histories built this way come to be recognised across the wider credit infrastructure, and not only within a single lender's loan book, remains an open question.

This article is based on reporting published by TechNext24; the original appears at TechNext24.