FairMoney Microfinance Bank has adopted alternative credit scoring to improve access to finance for Small and Medium Enterprises, positioning data analytics as a key driver of business growth.
In a statement issued on Thursday, the lender outlined how it is leveraging technology to support Nigeria’s SME ecosystem, where funding gaps remain a major constraint despite the sector’s dominant role in the economy.
According to the Small and Medium Enterprises Development Agency of Nigeria, SMEs account for about 96 per cent of all businesses in the country. In 2025, they contributed over 48 per cent to Nigeria’s Gross Domestic Product and provided approximately 84 per cent of total employment.
However, only a small proportion of SMEs have access to formal credit or the financial literacy required to meet lending eligibility standards.
FairMoney MFB said its alternative credit scoring model allows it to assess a broader range of data beyond traditional bank statements.
“Alternative credit scoring is the engine that allows FairMoney MFB to leverage broader data sets to better inform credit decisions for a wider range of SME customers. FairMoney MFB doesn’t just look at a bank statement; it looks at potential,” the statement read.
The bank explained that its system uses advanced data analytics and machine learning to assess creditworthiness based on non-traditional indicators such as app usage patterns, transaction velocity, and digital footprints. It added that this is done with customer consent and in line with Nigerian data protection regulations.
According to the lender, this approach enables businesses with limited formal financial histories to access funding opportunities previously out of reach.
The bank noted that eligible business owners can access up to ₦5m without physical collateral, subject to credit assessment. It said the digital-first model allows for rapid disbursement, helping entrepreneurs respond to time-sensitive opportunities such as inventory restocking, large orders, or equipment upgrades.
To improve eligibility for higher loan amounts, SMEs are encouraged to deepen engagement within the FairMoney ecosystem by conducting banking transactions and managing finances directly through the app after completing initial registration with their Bank Verification Number and business details.
FairMoney MFB emphasised that sustainable growth requires more than borrowing, stressing the importance of disciplined wealth management and accurate record-keeping.
“Every digital transaction creates a verifiable financial trail within the FairMoney MFB app, which the bank uses to build a more accurate credit profile for the merchant,” it stated.
The lender added that maintaining structured financial records has become both a strategic and regulatory necessity. It noted that Nigeria’s evolving tax environment increasingly relies on verifiable digital records for eligibility assessments, including incentives such as the zero per cent Company Income Tax rate for businesses with annual turnover below ₦100m.
It warned that SMEs without accurate, time-stamped digital records risk losing fiscal reliefs and may face penalties for non-compliance.
Beyond tax compliance, the bank said streamlined digital records help bridge information gaps that often limit access to credit. By presenting real-time insights into cash flow and profitability, SMEs can strengthen their creditworthiness and secure capital needed to scale in an increasingly formalised business environment.
