Nigeria: Unified identity data can curb predatory lending, says eTranzact

The Chief Executive Officer of eTranzact Plc, Niyi Toluwalope, has called for the adoption of a unified and tokenised national identity system as a critical step toward expanding access to affordable credit and curbing predatory lending practices in Nigeria.

Toluwalope made the call during a stakeholders’ engagement themed “Shaping the Future of Payments: Balancing Regulation and Innovation,” where he drew attention to structural weaknesses in the country’s credit and identity frameworks.

According to him, loan sharks continue to thrive because many Nigerians face urgent financial needs and are left with no option but to accept loans with excessive and unsustainable interest rates.

“Those making the money are lending to people who are desperate and need funds immediately. They take loans at impossible rates, and then they can’t keep up with repayment,” he said.

He stressed the need for a deliberate system that enables individuals with regular and verifiable income—such as security personnel, drivers and other salary earners—to access legitimate and affordable credit.

“Let’s build a system where anyone with regular, identifiable income can access credit. Once that happens, the emergency loan shark model will naturally fade away,” Toluwalope added.

The eTranzact CEO described the Bank Verification Number (BVN) as Nigeria’s most reliable financial database, noting that it has evolved into a secure and dependable system because of its strong linkage to financial transactions.

“The BVN is a fantastic database. It has matured, it is secure, and because it is tied to money, people take it seriously,” he said.

However, he argued that the country must move beyond BVN by strengthening and expanding the National Identification Number (NIN) framework to build a truly unified identity system that connects individuals to income streams and geographic data.

Comparing Nigeria with developed economies such as the United States, Toluwalope noted that effective credit systems depend on comprehensive and traceable financial footprints.

“In the US, your social security number, credit score, property titles and virtually everything you do are tracked across states. You can’t disappear; it always comes up,” he explained.

He also advocated the tokenisation of identity data to eliminate repeated Know Your Customer (KYC) processes across banks and financial institutions.

“Why should I submit the same KYC details every time I open an account? Let’s tokenise identity and secure it with OTP,” he said.

Toluwalope added that an identity system that updates automatically whenever changes occur would support credit cards, utility services and other financial products, while strengthening trust, accountability and financial inclusion across Nigeria.