How Cooperative Loans or Thrift Savings Affect Your Credit in Nigeria

Cooperative loans and thrift savings, also known as ajo, esusu, or collectors, are deeply rooted in Nigerian financial culture. These community-based systems help people save money and access small loans when formal banking isn’t an option. But with the rise of digital credit scoring, many people are asking: do these informal systems affect your credit score?

Here’s what you need to know.

Cooperative Loans: Formal or Informal?
Cooperatives vary widely. Some are informal workplace groups, others are registered financial societies. When cooperatives operate without any connection to licensed financial institutions or credit bureaus, your borrowing and repayment activity typically doesn’t show up on your credit report. That means:

• Paying a cooperative loan on time won’t improve your credit score.
• Defaulting on a cooperative loan also won’t lower your credit score, unless they report you.

But that’s changing.

Some cooperatives and thrift groups are beginning to partner with credit bureaus, if yours does, then your loan behaviour can impact your credit profile. This is especially true if:

• You’ve signed a formal agreement with digital lenders powered by cooperatives.
• The cooperative submits member data to a credit bureau.

So while your ajo group in the market may not impact your credit, a registered cooperative with structured lending may.

What About Thrift Savings?

Thrift savings on their own do not build credit because they’re not reported to credit bureaus. However, being consistent with contributions can help in other indirect ways:

• It builds financial discipline, which helps when you start using formal credit.
• It may make you eligible for small business loans or grants if you can show a record of responsible savings.

In short, thrift savings won’t show up on your credit report unless the platform managing it partners with a licensed credit bureau.

Should You Avoid Cooperative Loans?

Not at all. They can be a useful way to access funds without high interest rates or complex bank requirements. But if your goal is to improve your credit score, be intentional:

• Ask if your cooperative reports to any credit bureau.
• If not, consider using formal lenders (like microfinance banks or BNPL services) that report repayment activity.

Want to track your progress and understand what’s really affecting your score?
Scorewise helps you track your credit score, understand what impacts it, and grow your financial reputation. The platform is designed by leading fintech innovator Tendar, and is available on the App Store or Google Play Store.