Nigeria’s fintech lending market is booming, but beneath the surface lies a deepening repayment crisis. While loan disbursement has become seamless, repayment collection remains fragmented and inefficient, a gap now widening as default rates rise across digital lending.
Zeeh Africa, recently recognised as the best AI-powered open banking platform 2025, is stepping into this space with the relaunch of its direct debit solution designed to automate repayments, rebuild trust, and help lenders scale responsibly.
The central bank of Nigeria’s (CBN) credit conditions survey for Q2 2025 reveals a troubling trend: lenders reported higher default rates across secured and unsecured loans, with the net percentage balance for unsecured loan defaults climbing to +6.6, reflecting widespread repayment failures.
This surge is amplified by the rapid expansion of digital lending platforms, which have grown to 425 as of May 2025, up from 320 the previous year. The proliferation has created intense competition for borrowers, but without proper repayment infrastructure, it has also fuelled unsustainable lending.
Compounding the problem is Nigeria’s slow credit reporting system. Some credit bureaus take up to 30 days to update borrower information, allowing individuals to secure new loans even while existing debts remain unpaid.
Analysts say small businesses and household borrowers have been most affected, with lenders citing mounting loan stacking, inconsistent repayment behavior, and growing operational costs associated with chasing delinquent borrowers.
“The irony of Nigeria’s fintech boom is that while we’ve made it incredibly easy to disburse loans, we’ve remained remarkably inefficient at collecting repayments,” said David Adeleke, CEO of Zeeh Africa. “Manual follow-ups, failed transfers, and unreliable payment promises create a cycle where good borrowers get lumped with bad ones.”
Read also: Digital Economy: VAS revenue explodes 470% as digital lifestyle services boom in 2024
A new infrastructure for automated, consent-based repayments
Zeeh Africa’s Direct Debit solution tackles one of the biggest bottlenecks in the credit value chain: dependable, automated repayment collection.
The platform supports single payments, instalment schedules, and subscription debits, giving lenders, BNPL operators, digital schools, and subscription businesses a structured, technology-driven framework for handling repayments.
The system operates entirely on customer consent. Borrowers authorise debit mandates with clear parameters, validity periods, and repayment schedules.
Once activated, repayments execute automatically on due dates, accompanied by real-time updates through webhooks. This eliminates the need for large collections teams and reduces the friction caused by customer-initiated payments that frequently fail.
“We’re seeing particularly strong interest from pay-later companies that have built solid underwriting but struggle with the operational burden of chasing payments,” said Ogechi Mbaka, product manager at Zeeh Africa. “Instead of accepting 30 percent default rates as normal, they can automate repayment flows while maintaining full transparency with customers.”
Integrating identity verification, KYC tools, and bank statement analysis, the direct debit solution anchors Zeeh’s broader vision for end-to-end credit lifecycle infrastructure from onboarding and affordability checks to automated collections.
Compliance, trust, and the future of sustainable lending
Zeeh’s timing is strategic. The FCCPC’s digital, electronic, online, or non-traditional consumer lending regulations 2025, which took effect in July, mandate transparent, consent-based collection methods.
They also prohibit lenders from accessing borrowers’ photos, contact lists, or call logs practices that fueled a reputation crisis for the digital lending sector. Penalties for violations now reach N100 million or 1 percent of annual turnover.
By emphasising customer authorisation, advance debit notifications, mandate visibility, and clear dispute-resolution workflows, Zeeh’s direct debit solution aligns squarely with these new compliance standards. It also helps rebuild trust in a market rattled by aggressive recovery tactics and privacy abuses that have made headlines and drawn regulatory scrutiny.
Early adopters, now numbering at least 20 across lending, education finance, and subscription services, report significant improvements in repayment reliability. For many, this infrastructure offers a path to sustainable growth in a market where capital is expensive, trust is fragile, and repayment efficiency determines survival.
As Africa’s fintech sector is projected to have a $65 billion valuation by 2030, the future will belong not just to the companies offering innovative financial products, but to those building the rails that make digital finance compliant, trustworthy, and scalable.
Zeeh Africa notes that the next phase of fintech growth will depend on the quality of infrastructure supporting it, and reliable, automated collections sit at the very heart of that transformation.
