Federal Government Launches Pension-Backed Loan Scheme to Support Retirees.
By Yahaya Zakka Minna..
The Federal Government of Nigeria, in partnership with the Nigerian Consumer Credit Corporation, unveiled a pension-backed loan scheme on Thursday aimed at empowering retirees.
The initiative, developed in collaboration with Leadway Trustees and Optimus Bank, allows retirees to access loans starting at ₦50,000, with the maximum loan amount determined by the retiree’s pension income.
Over the past two decades, Nigeria’s pension system has seen extensive reforms, notably through the Pension Reform Act of 2004 and its amendments that instituted the Contributory Pension Scheme, which aimed to remedy decades of mismanagement and unpaid retirement benefits. However, despite these changes, retirees frequently encounter financial struggles due to limited credit access and delayed payments, leaving them unable to meet urgent financial needs.
During the signing of a Memorandum of Understanding in Abuja, Uzoma Nwagba, Managing Director and CEO of CREDICORP, emphasized that this initiative could significantly enhance the lives of retirees.
He highlighted that the scheme, themed “Empowering retirees with consumer credit,” caters to both federal and state pensioners.
Nwagba commended President Bola Tinubu for his inclusive financial governance model, as outlined in the Renewed Hope Agenda, reiterating that the pension-backed loan program underscores this administration’s commitment to creating opportunities for all Nigerians, including senior citizens historically marginalized in the consumer credit space.
“The program leverages pension income to provide retirees with tailored, low-interest loans that are secure and sustainable,” he stated. “This innovative product ensures that Nigeria’s senior citizens can access credit with dignity, free from exorbitant rates and complex application processes.”
He further remarked, “Annuitants have long been the backbone of Nigeria’s progress, yet they have been overlooked in the credit ecosystem. This program aims to change that narrative. Our collaboration with Leadway Trustees, known for their expertise in pension management, offers a credit solution that is safe, affordable, and transparent—representing a redefined, inclusive, and empowering model of consumer credit.”
The launch event attracted stakeholders from the financial and pension sectors, along with annuitants’ associations, and featured testimonials from beneficiaries. Amina Sule, a 68-year-old retired teacher, expressed gratitude for the scheme, stating, “Having wanted to start a small poultry business for years, this program gives me the confidence to borrow affordably, knowing my pension secures my loan. It’s not just credit; it’s hope and independence.”
Retired civil servant Chukwuemeka Okeke added, “Medical bills can be overwhelming. This loan allows me to cover my healthcare needs without stress. The application process was straightforward, making me feel respected as a retiree.”
While consumer credit in Nigeria is still underdeveloped compared to countries like the United States and the United Kingdom—where retirees can easily obtain mortgages or personal loans backed by their pension or social security income—this new initiative marks the first organized effort to integrate retirees into Nigeria’s consumer credit framework.
By utilizing pension payments as collateral, the pension-backed loan program aims to provide senior citizens with affordable credit for essential needs such as healthcare and small business ventures.
This initiative aligns with President Bola Tinubu’s Renewed Hope Agenda, which prioritizes financial inclusion, poverty alleviation, and economic empowerment for all Nigerians.
