Sparkle CEO urges banks to use transaction data as collateral for SME loans

Uzoma Dozie says Nigerian banks should replace traditional collateral with data‑driven AI models to reach more small businesses.

Uzoma Dozie, the chief executive of Sparkle MFB, told TechCabal that banks in Nigeria need to change how they assess credit risk for small and medium enterprises.

He argues that traditional collateral, land, equipment or personal guarantees, leaves many SMEs without access to finance. Instead, he proposes using merchants' transaction histories and artificial‑intelligence scoring models as a form of collateral.

Dozie believes that this shift would broaden credit supply, lower borrowing costs and boost financial inclusion across the country.

Why it matters to your business

For founder‑led SMEs, easier access to loans means they can invest in inventory, hire staff or upgrade technology without the high cost of securing physical assets.

Banks that adopt data‑driven lending can price risk more accurately, reducing interest rates and making credit more sustainable for Nigerian businesses.

What to do on Monday

• Review your business’s digital transaction records, bank statements, payment platform data, and sales logs, and ensure they are clean and up‑to‑date.
• Identify fintech partners or lenders that already use AI credit models and start a dialogue about loan terms.
• Prepare a concise data‑driven credit brief for your next loan application to demonstrate credibility without traditional collateral.

Sources

• techcabal.com: “Data is the collateral”: Sparkle CEO Uzoma Dozie on fixing Nigeria’s SME lending blind spot

Reported by techcabal.com.