Most people spend years focused on one financial goal: Building Wealth.
They work hard, invest wisely, celebrate strong returns, and watch their portfolios grow. It is an exciting journey, and for many, reaching financial success feels like crossing the finish line.
Thousands of well-managed, growth-ready companies with ambitious leadership and teams in Nigeria are systematically blocked from accessing the capital they need to scale. Over time, they will be classified as businesses that failed. But they are not.
They are still generating real revenue, employing thousands of Nigerians and servicing the Nigerian markets and communities with goods and services that are daily essentials. This is the quiet crisis that is unfolding across Nigeria’s corporate landscape. For better or worse, it does not make the same headlines that currency volatility or commodity shocks would.
And yet the consequences are longer lasting. These companies are a part of the “missing middle”. They are too large and have operations too complex for microfinance. But they are also too small to access public capital markets or attract conventional credit from commercial and merchant banks.
This specific gap stalls their growth and evaporates their potential, leaving unrealised value on the table. Private credit in the most direct sense is a solution to the missing middle problem.
For Nigeria and Africa, this is particularly a lifeline because today’s mid-caps will go on to become Africa’s multinationals.
The structural root
Nigeria’s commercial banking sector has, for decades, been a pillar of the formal economy. But the evolution of global regulatory frameworks, particularly Basel III, has changed how banks can deploy capital.
Today, capital adequacy requirements, sector concentration limits and obligatory thresholds that are tightened to strengthen banks from failure have also recalibrated how banks can deploy capital.
These same guardrails established to protect systemic stability are now narrowing the funnel for bankable credit.
Consequently, there is a predictable hierarchy with the largest corporates able to access credit with relative ease but the lower mid-corporates with turnovers between N3 billion and N5 billion struggling to gain the same access. But a N3 billion turnover is not a joke.
Nigerian banks are not to be blamed as they are operating rationally within a framework that requires them to be prudent. Unfortunately, this means there is a category of corporates that the current configuration of the banking system is not incentivised to serve.
And this is where private credit exists –to complement the commercial banks and fill the space that the current regulatory architecture has left vacant.
Disciplined capital is the framework behind private lending. It has long been assumed and even asserted that flexibility equals a relaxation of credit discipline.
This is false. Private credit transactions exist within a rigorous framework of prudential credit risk guidelines that govern the investment process from its origination to exit.
Transactions are anchored on a simple credit analysis: borrowers must be operating a real business in a viable industry and demonstrate a track record of positive cash flow generation. Private credit does not service pre-revenue and speculative ventures.
It is underwritten because the business has proven that it can service its obligations from its generated cash flow and not on any projections or the liquidation of its assets alone. The covenant architecture is central to private credit’s discipline.
Transactions are governed by carefully structured maintenance and incurrence covenants, financial ratio tests, reporting obligations, restrictions on additional indebtedness, limitations on dividend distributions and change-of-control protections, serving as the early warning systems and helping to preserve lender rights throughout the lifecycle of the transaction.
Collateral sufficiency is another non-negotiable. Private credit transactions are structured so they can satisfy stringent asset-based lending principles. Security interests over sufficient and realisable collateral, real property, plant and equipment, receivables, inventory, bank guarantees and where appropriate, share pledges and personal guarantees, must be established, perfected and regularly stress-tested against recovery scenarios.
These principles are not mere formalities; they are the structural foundation allowing institutional capital to be deployed while providing the downside protections to make long-term investors comfortable.
Building next generation of African corporate champions
The companies that will list on the Nigerian Stock Exchange in the 2030s are right now the lower mid corporates waiting for the capital that disciplined private credit can reliably provide.
There is an opportunity to build an entirely new generation of large and diversified regionally dominant corporate champions. With patient, structured private credit behind it, a business that has proven its model in Lagos can expand to Abuja, Port Harcourt and Kano.
It can execute strategic acquisitions of complementary businesses that would otherwise remain fragmented competitors. It can professionalise its operations, attract senior talent, and build the institutional depth that transforms a founder-led enterprise into a durable corporate institution.
This is the organic growth pathway and private credit is uniquely positioned to fund it. There is a second, equally powerful pathway: the rollup platform strategy, the deliberate consolidation of multiple smaller businesses within a sector, whether logistics, healthcare delivery, agro-processing, FMCG distribution or business process outsourcing, under a single well-capitalised platform.
Individual companies may be too small to be investable on a standalone basis. Combined, they become a compelling large-cap story.
Private credit provides the acquisition financing, the working capital bridging, and the patient capital horizon that allows a consolidation thesis to play out over multiple years without the short-termism that equity markets can impose.
Capital market destination
Nigeria’s capital markets need new listings, companies of genuine scale, quality, and institutional depth that attract foreign investors and signal African economic confidence.
Private credit is the pipeline to that outcome. When a lower mid-corporate company accesses private credit to execute its growth strategy and does so within the governance framework that institutional lenders demand, it simultaneously builds the track record, financial discipline and reporting standards that will make it IPO-ready.
The companies that list on African exchanges in the coming decade will, in significant part, have been built on the foundation of private credit extended today.
Nigerian pension funds, insurance companies, and development finance institutions who anchor this ecosystem early will not only generate strong risk-adjusted returns, but they will also become co-architects of the corporate Nigeria they wish to inhabit.
Path forward
We are at an inflection point where the structural conditions constraining Nigeria’s lower mid-corporates, the regulatory recalibration of bank lending, the immaturity of domestic institutional participation in alternative assets, and the absence of a scaled private credit ecosystem are precisely the conditions that create the most compelling entry point for those with the foresight to act now.
The companies that will dominate Nigeria’s capital markets in 2035 are, at this moment, lower mid-corporates with proven models and growth trajectories being held back by a lack of appropriate capital.
Private credit, deployed with rigor, structured with discipline, and anchored in the credit fundamentals that protect all stakeholders, removes that constraint.
The talent is here; the opportunity is vast and the capital is available. What is required now is its deliberate and optimistic deployment as the foundational instrument of the next era of African corporate development.
Those who move with clarity and conviction in this moment will not merely participate in that era. They will define it.
Deji Opeola is the CEO of ARM Private Debt.
As part of our commitment to advancing education and creating opportunities for future generations, ARM Holding Company has awarded scholarships worth ₦4 million to two exceptional pupils through the Robert Akinjewe and Deji Omotoso Scholarship Fund.
The scholarship presentation, held on 22 July 2026, recognised the Best Graduating Students from Ireti Primary School and Hope Primary School. Each recipient received a ₦2 million scholarship to support their continued education.
The beneficiaries, Fiyinfoluwa Fagbore and John Philip, were selected based on their outstanding academic performance, exemplary character, and commitment to learning. Their achievements reflect the values of discipline, resilience, and excellence that the scholarship seeks to promote.
The Robert Akinjewe and Deji Omotoso Scholarship Fund was established to honour the enduring legacy of two distinguished individuals whose lives exemplified excellence, integrity, and service. Through this initiative, ARM celebrates academic achievement while providing deserving students with the support they need to pursue their educational aspirations with confidence.
The scholarship programme also reflects ARM’s broader commitment to creating sustainable impact by investing in education, strengthening communities, and empowering the next generation of leaders. By supporting young learners at a critical stage in their academic journey, ARM continues to remove barriers to opportunity and contribute to a more inclusive and prosperous society.
As ARM continues to champion initiatives that create lasting value, the Company remains committed to expanding access to quality education and partnering with communities to help young Nigerians realise their full potential.
Nigeria needs approximately 20 million additional homes. Most discussions focus on how quickly those homes can be built. That is an incomplete question. The more important question is what building those homes can do for the Nigerian economy.
Countries that became economic powers did not treat housing merely as shelter. They used housing as an engine of industrialisation, job creation and wealth creation. Nigeria has an opportunity to do the same by using housing policy to deliver Decent Housing, Thriving Industries and Lasting Wealth.
The recent publication regarding a proposed Chinese intervention in Nigeria’s housing sector provides the immediate context for this opinion. It is important to state from the outset that there should be no objection to Chinese participation, or indeed to any credible foreign investor bringing capital, expertise and technology into Nigeria. On the contrary, Nigeria requires significant interventions and partnerships if it is to address its infrastructure and housing challenges at scale.
The issue, therefore, is not whether Chinese companies, or foreign companies generally, should participate. The more important question is whether the structure of such interventions maximises Nigeria’s long-term economic interests. Does the intervention simply deliver houses, or does it use the opportunity to build Nigerian industries, create jobs, transfer skills, strengthen domestic companies and expand productive capacity? That distinction matters because Nigeria’s housing challenge exists within a much broader national ambition: the goal of becoming a US$1 trillion economy.
A trillion-dollar economy cannot be achieved simply by constructing more buildings or importing more goods and services. It requires a fundamental expansion of Nigeria’s productive capacity: more manufacturing, stronger domestic enterprises, higher productivity, better-paying jobs and a larger middle class. Housing provides one of the greatest opportunities to achieve these objectives simultaneously.
The real measure of success should therefore not only be the number of houses delivered, but the economic capability created in the process of delivering them. Housing has one of the highest economic multipliers of any sector. Every house built generates demand across dozens of industries—from cement and steel to furniture, transport, insurance, banking and professional services.
Housing and Industrial Policy
The world’s most successful economies did not view housing merely as a social intervention. They recognised that housing is also industrial policy. Every housing development creates demand across a broad economic ecosystem. Imagine the economic impact of constructing 500,000 homes annually using up to 80% locally sourced building materials: creating 250,000 direct contruction jobs and more than 1 million indirect jobs, while catalysing demand across major sectors of the economy, such as cement, steel, tiles, furnitute, logistics, engineering, finance, insurance and professional services. A well-designed housing programme does more than provide shelter. It creates factories, develops technical skills, supports small businesses and generates employment far beyond the construction sites.
Countries such as South Korea, Singapore, Malaysia and Turkey deliberately used housing and infrastructure development to strengthen domestic industries that later became internationally competitive. Perhaps the most instructive example is China.
China did not become a global construction powerhouse because it relied on foreign companies to build its cities. It used its enormous domestic demand to develop Chinese manufacturers, construction companies, engineering firms, equipment producers and technology providers. Over time, these companies became global players.
That is perhaps the most important lesson Nigeria should take from China. The objective is not to reject foreign participation but to ensure that foreign participation builds Nigerian capability. Every housing policy should pursue four objectives simultaneously: 1) Shelter 2) Industrialization 3) Employment 4) Wealth Creation
The Difference Between Investment and Imported Growth
There is an important distinction between attracting foreign investment and importing economic activity.
Nigeria undoubtedly needs foreign capital, technology and expertise. However, a predominantly turnkey approach, where foreign companies finance, design, supply and execute projects with limited domestic participation, risks solving today’s housing shortage while missing tomorrow’s industrial opportunity.
Government must therefore carefully weigh not only the intention behind every policy intervention but also its broader consequences.
Every policy decision has economic outcomes. It influences whether local manufacturers invest in new capacity, whether Nigerian contractors develop expertise, whether young Nigerians acquire technical skills and whether domestic companies can grow into competitive enterprises. A policy may achieve its immediate objective while unintentionally weakening the foundations required for long-term economic transformation.
The question policymakers must therefore ask is not simply: “Will this policy deliver houses?” It should also extend to: “Will this policy leave Nigeria with greater productive capacity than it had before?”
This is especially important given the ambition of building a US$1 trillion economy. A trillion-dollar economy cannot be built by importing economic activity. It must be built by expanding domestic production.
Nigeria Has Two Housing Problems, Not One
Much of the housing debate focuses on the shortage of supply. That is certainly a major challenge. However, Nigeria faces another equally important problem: affordability. The depreciation of the naira has fundamentally changed the economics of housing delivery. Construction costs have risen significantly due to foreign exchange pressures, imported inputs and higher financing costs. House prices have inevitably followed. Household incomes, however, have not increased at the same pace. The result is a widening affordability gap.
This reveals a deeper reality: Nigeria’s housing challenge is not only a housing supply challenge. It is also an economic development and wealth distribition challenge. A country cannot achieve mass homeownership if a significant proportion of its population lacks the purchasing power to buy homes. This is a lesson that many successful economies understood.
Broad-based homeownership did not emerge simply because governments built houses or expanded mortgage availability. It emerged because those countries first created productive employment, increased incomes and expanded the economic capacity of their citizens. In other words, prosperity generally precedes widespread homeownership. This is an important distinction for Nigeria.
While homeownership should remain the ultimate aspiration, expecting immediate mass ownership in an economy where incomes remain under pressure may create unrealistic expectations. The more important policy objective should be creating pathways through which citizens can progressively move towards ownership as their economic circumstances improve. This is where rent-to-own models become particularly relevant.
Why Rent-to-Own Should Be a Central Part of Nigeria’s Housing Strategy
If industrial policy addresses the supply side of housing, then rent-to-own addresses the demand side by expanding the number of households able to participate in the market. Rent-to-own should not be viewed as a compromise or a second-best alternative to ownership. In many countries, rental housing has played a critical role in allowing citizens to access secure accommodation while economies develop and household wealth accumulates.
At different stages of economic development, many successful societies recognised that immediate homeownership was not always realistic or desirable for every household. Strong rental markets provided stability, while rising incomes and asset accumulation gradually enabled more people to transition into ownership. The mistake is to assume that ownership must always be the starting point of housing policy. In reality, ownership is often the outcome of economic progress.
For millions of young Nigerian professionals, entrepreneurs, informal sector workers and families with stable incomes but limited savings, the challenge is not the willingness to pay. The challenge is the inability to immediately meet the deposit requirements and financing conditions associated with mortgage ownership.
A well-designed rent-to-own model creates a bridge. It allows households to secure decent housing today while gradually building equity towards ownership tomorrow.
It also aligns housing policy with the broader objective of wealth creation. Rather than placing families into mortgages they may struggle to sustain, it allows ownership to develop alongside increasing incomes and financial capacity. This should form an important second phase of MREIF.
The Next Evolution of MREIF: Building on a Successful Foundation
The establishment of the Ministry of Finance Incorporated Real Estate Investment Fund (MREIF) represents one of the most important and innovative interventions in Nigeria’s housing sector in recent years. Its introduction of a single-digit mortgage rate structure addresses one of the most significant historical barriers to homeownership in Nigeria: the absence of affordable, long-term housing finance.
For decades, the Nigerian housing market has been constrained by mortgage rates that made homeownership inaccessible to a large proportion of the population. By addressing this challenge, MREIF has created a more credible pathway towards ownership and has demonstrated the important role that government-backed financial innovation can play in unlocking the housing market. Since its inception in March 2025, MREIF has disbursed a total of N140bn through 21 financial institutions towards the creation of 2018 mortgages in 27 states. This achievement should not be understated.
The objective should be to amplify and expand the success of MREIF, not to question its relevance. However, as important as affordable mortgage finance is, Nigeria’s housing challenge is multidimensional. Access to financing is a necessary condition for homeownership, but it is not the only condition. While mortgages solve the financing challenge, they do not, by themselves, solve every affordability challenge.
The ability of households to access mortgages ultimately depends on broader economic factors: income levels, employment stability, housing prices, construction costs and household wealth. This is why the next phase of MREIF should build on its current success by expanding the housing ecosystem around it.
Beyond providing affordable mortgage finance, MREIF could become a broader platform that supports the supply side of the market by encouraging lower-cost housing production, supporting domestic manufacturers of building materials, providing development finance to credible developers and promoting modern construction methods that reduce costs.
Equally important, MREIF should recognise that Nigeria’s pathway to widespread homeownership will evolve as the economy grows. Many Nigerians today may not yet be ready for immediate mortgage ownership, not because they lack aspiration or commitment, but because their income and accumulated wealth have not yet reached that stage. This is where a complementary rent-to-own model becomes valuable.
Rent-to-own should not be viewed as an alternative to MREIF’s mortgage success. Rather, it should be viewed as an additional pathway that expands the number of Nigerians who can eventually benefit from homeownership. It provides a bridge for households who can afford rental payments today but need time to build equity, savings and financial capacity before transitioning into full ownership.
In this way, MREIF can serve both those who are ready for ownership today and those who are on the journey towards ownership tomorrow. The ultimate ambition should be a housing ecosystem where affordable mortgages, rent-to-own pathways, lower construction costs and rising household incomes work together to make sustainable homeownership achievable for millions more Nigerians.
A Better Framework for Foreign Partnerships
None of this argues against foreign participation. Nigeria should welcome investors who bring capital, technology and expertise. However, partnerships should be structured around national development objectives.
The key question should be:
When this project is completed, what additional capability will Nigeria possess? A successful partnership should leave behind more than completed buildings. It should create Nigerian suppliers, skilled workers, manufacturing capacity, stronger local companies and technology transfer. Foreign expertise should accelerate Nigerian capability, not replace it.
That is how countries have successfully used global investment to build national prosperity.
Building More Than Homes
Nigeria unquestionably needs more houses, but it needs something even more fundamental: an economy in which millions more Nigerians can afford those houses. The housing deficit should therefore not be viewed merely as a construction problem. It should be seen as one of Nigeria’s greatest opportunities to accelerate industrialisation, create employment, deepen manufacturing, increase incomes and expand the middle class.
The objective should not simply be to build 10,000 homes through a foreign contractor. The objective should be to use those 10,000 homes to build the industries, skills, companies and wealth that enable Nigeria to build the next one million. If Nigeria approaches housing with that mindset, it will not merely reduce a housing deficit, it will create one of the foundations required to achieve a US$1 trillion economy.
The true measure of success is therefore not how many houses are completed. It is whether the process of building those houses leaves Nigeria stronger, more productive and more prosperous than before.
Housing policy is not simply about shelter. It is about nation-building.
