FairMoney Microfinance Bank has employed alternative credit scoring to boost the ability of Small and Medium Enterprises to scale.

This was indicated in a statement from the lender on Thursday, which highlighted the different ways it is supporting the SME ecosystem.

The PUNCH reports that funding remains a challenge for SMEs in the country, despite representing approximately 96 per cent of all businesses in the country.

According to the Small and Medium Enterprises Development Agency of Nigeria, in 2025, Nigerian SMEs contributed over 48 per cent to Nigeria’s GDP and accounted for about 84 per cent of total employment. However, while the vast majority of SMEs play a vital role in national development, only a small minority have access to formal credit or the financial literacy required to scale and meet eligibility requirements.

It stated, “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. By utilising Alternative Credit Scoring powered by advanced data analytics and machine learning, FairMoney MFB assesses creditworthiness based on non-traditional data, such as app usage patterns, transaction velocity, and digital footprints – with customer consent and in accordance with Nigerian data protection requirements.

“This approach opens the door for businesses with limited formal financial histories to access real growth opportunities that were previously out of reach.

For the Nigerian SME, this presents the opportunity to scale from small-scale survival to ambitious expansion, securing the funding necessary to innovate and compete based on the real-time strength of their operations.”

The lender added that when it comes to credit facilities, it prioritises digital speed and accessibility, thus enabling eligible business owners in Nigeria to secure up to N5m without physical collateral; however, access remains subject to credit assessment.

“This rapid disbursement creates a real opportunity for entrepreneurs to act on time-sensitive growth prospects, whether that means restocking inventory ahead of a peak season, fulfilling a sudden large-scale order, or upgrading essential equipment.

“To improve their eligibility for higher loan amounts, SMEs simply need to increase their engagement with the FairMoney ecosystem; banking and managing finances directly through the app after an initial application using their BVN and business details,” the bank stated.

FairMoney MFB maintained that true business growth requires a shift from simple borrowing to disciplined wealth management.

Highlighting the importance of record-keeping for SMEs, the lender stated, “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.” This means that simply by making it easier for customers to pay, SMEs could potentially improve their credit profile and gain access to more competitive pricing needed for long-term expansion.

“Maintaining detailed financial records has transitioned from a best practice to a regulatory necessity for SMEs. The current landscape, influenced by the Nigeria Revenue Service, increasingly values verifiable digital records as a means of supporting eligibility assessments for small business tax holidays. Maintaining such records through record-keeping can facilitate compliance with requirements for exemptions, such as the zero per cent Company Income Tax rate for businesses with an annual turnover below N100 million. Without accurate, time-stamped digital trails, including structured e-invoices and clear transaction histories, SMEs risk not only losing these vital fiscal reliefs but also facing significantly sharper penalties for late filing or non-compliance.

“Beyond tax, streamlined records bridge the information gap that often hinders access to credit; by presenting a ‘financial compass’ of real-time cash flow and profitability, business owners can prove their creditworthiness to partners, turning their compliance into a strategic tool for securing the capital needed to scale in an increasingly formalised market.”