ONYINYECHI NWAIGBA 
Access to finance remains one of the biggest challenges facing businesses and entrepreneurs across Nigeria. For many, obtaining a loan from a financial institution often requires providing substantial collateral, a requirement that excludes thousands of otherwise viable businesses from accessing the capital they need to grow.
In a move that could significantly change this reality, Jaiz Bank Plc has announced plans to introduce a new financing solution that would allow customers to access funding without relying on traditional collateral requirements.
The proposed financing model, which is currently awaiting regulatory approval from the Central Bank of Nigeria (CBN), is expected to leverage cash-flow lending principles to assess borrowers based on the performance of their businesses rather than physical assets.
The initiative was disclosed by the Managing Director and Chief Executive Officer of Jaiz Bank, Dr. Haruna Musa, following the bank’s 14th Annual General Meeting held in Abuja.
According to Musa, the bank has developed several financing products designed to improve access to credit and support economic growth while promoting financial inclusion across the country.
A Shift Away from Traditional Collateral
One of the major barriers preventing many Nigerians from accessing formal financing is the requirement to provide landed property, fixed assets, or other forms of collateral before obtaining a loan.
While such requirements help financial institutions reduce lending risks, they also exclude many individuals and businesses that may have strong revenue streams but lack significant assets.
Jaiz Bank’s proposed model seeks to address this challenge by focusing on the actual financial performance of borrowers.
Under the cash-flow lending system, customers will be assessed based on their transaction history, business earnings, and cash-flow records. The bank intends to analyse financial data from accounts held with Jaiz Bank and other financial institutions to determine a customer’s ability to repay financing obligations.
This approach shifts the emphasis from asset ownership to business performance, potentially opening up opportunities for many entrepreneurs and business operators who have struggled to access formal credit due to collateral limitations.
Industry experts have long argued that cash-flow-based lending can help bridge financing gaps in developing economies, especially where many businesses operate without significant fixed assets.
If successfully implemented, the model could contribute to a more inclusive financial ecosystem by allowing more individuals and businesses to participate in formal credit markets.
Alternative Risk Management Measures
While removing traditional collateral requirements could expand access to financing, it also raises questions about risk management and loan recovery.
To address these concerns, Jaiz Bank plans to adopt alternative mechanisms designed to reduce lending risks while maintaining accessibility.
Among these measures are loan guarantee arrangements and the use of signed Global Standing Instruction (GSI) mandates.
The GSI framework allows financial institutions to recover outstanding obligations from accounts linked to a borrower across the banking system under specific regulatory guidelines.
By combining cash-flow assessments with alternative risk mitigation tools, the bank aims to create a financing framework that balances accessibility with responsible lending practices.
This strategy reflects broader trends within the financial sector, where institutions are increasingly exploring innovative methods to expand lending without compromising financial stability.
Leveraging Technology to Improve Access
Beyond introducing new financing products, Jaiz Bank also plans to digitise significant aspects of the financing process.
The bank revealed that customers would be able to apply for financing and complete much of the process remotely using digital platforms and mobile devices.
This development is expected to reduce the need for physical branch visits, improve convenience, and shorten processing timelines.
Digital financial services have become increasingly important in Nigeria as banks seek to serve customers across diverse geographical locations.
By integrating technology into its financing operations, Jaiz Bank hopes to reach more people, particularly those in underserved and remote communities where access to banking services may be limited.
The move also aligns with broader efforts within the Nigerian financial sector to promote digital transformation and improve customer experiences through technology-driven solutions.
Capital Raise to Support Expansion
Alongside plans for new financing products, Jaiz Bank has announced intentions to raise an additional N150 billion in capital.
According to the bank, the proposed capital raise will strengthen its financial position and support future growth initiatives.
The exercise, which remains subject to regulatory approvals, is expected to take place in phases between July and September.
The additional capital is intended to enhance the bank’s ability to finance larger projects across strategic sectors of the Nigerian economy.
These sectors include agriculture, manufacturing, renewable energy, export trade, and food security initiatives.
Access to long-term financing remains a critical challenge in many of these sectors, and increased capital capacity could enable the bank to play a larger role in supporting economic development and productive investments.
The planned capital raise also reflects growing efforts by financial institutions to strengthen their balance sheets in response to evolving regulatory requirements and expanding market opportunities.
Supporting Key Economic Sectors
Jaiz Bank has identified several priority areas for future financing, including agriculture and alternative energy.
Agriculture remains one of Nigeria’s largest employers and a key contributor to economic activity, yet many participants across agricultural value chains continue to face significant financing constraints.
By developing new financing products targeted at agricultural activities, the bank hopes to support increased productivity, food security, and value-chain development.
The lender also plans to expand financing for renewable and alternative energy projects.
As energy costs continue to affect households and businesses nationwide, investments in renewable energy solutions are increasingly viewed as important for economic resilience and sustainable development.
Financing support for clean energy projects could help accelerate adoption while contributing to broader environmental and sustainability goals.
Managing Costs Amid Economic Pressures
Like many businesses operating in Nigeria, financial institutions continue to face rising operational costs driven by inflation, energy expenses, and other economic pressures.
Despite these challenges, Jaiz Bank says it remains optimistic about its growth prospects.
To improve efficiency and manage expenses, the bank has introduced several cost-saving measures.
These include deploying off-grid energy solutions for some of its branches and exploring the integration of electric vehicles into its operations.
Such measures are intended to reduce long-term operating costs while supporting sustainability objectives.
The adoption of alternative energy solutions by financial institutions also reflects a growing recognition of the need to build resilience against energy-related disruptions and rising utility expenses.
Strong Financial Performance
Jaiz Bank’s latest financial results indicate continued growth across key performance indicators.
The bank reported that total assets increased by approximately 19 percent, reaching nearly N1.3 trillion.
Customer deposits also recorded significant growth, rising by more than 24 percent to exceed N1.12 trillion.
Profit before tax increased by 28 percent to N31.24 billion, reflecting improved earnings performance despite a challenging operating environment.
These figures highlight the bank’s expanding customer base and growing market presence within Nigeria’s financial sector.
Strong financial performance provides additional support for the bank’s expansion plans and strengthens its capacity to introduce new products and services.
Expanding National Presence
Jaiz Bank currently operates 55 branches across Nigeria and plans to establish 10 additional branches before the end of the year.
The bank is already present in 26 states and has set an ambitious target of operating in every state capital within the next two years.
Expanding branch networks remains important for reaching new customers and deepening financial inclusion, particularly in areas where banking penetration remains relatively low.
In addition to domestic expansion, the bank is also considering opportunities beyond Nigeria.
According to its leadership, plans are being explored to expand operations internationally within the next five years as part of efforts to strengthen the institution’s position in the non-interest banking sector.
What the New Financing Model Could Mean
If approved by regulators, Jaiz Bank’s proposed cash-flow lending model could represent an important step toward improving access to finance in Nigeria.
By reducing dependence on traditional collateral and focusing on actual business performance, the model has the potential to unlock financing opportunities for thousands of customers who have historically been excluded from formal credit systems.
The initiative also reflects a broader shift within the financial industry toward data-driven lending models that utilise transaction histories and digital records to evaluate creditworthiness.
As Nigeria continues efforts to promote financial inclusion and stimulate economic growth, innovations that make financing more accessible could play an important role in supporting entrepreneurship, job creation, and sustainable development.
For many aspiring borrowers, the success of such initiatives may ultimately determine whether access to capital becomes a privilege reserved for asset owners or a realistic opportunity available to a much wider segment of the population.
The development also reflects broader conversations across Africa about expanding access to development finance and creating more inclusive funding systems capable of supporting economic growth and entrepreneurship. AfDB Pushes for a New Era of Homegrown Development Finance.
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