CREDIT ACCESSIBILITY AND THE SOCIAL COLLATERAL MODEL: EXAMINING THE CONDITIONS OF LOAN ACQUISITION AMONG TRADERS IN BODIJA MARKET IBADAN, NIGERIA

Abstract

Access to credit remains uneven among women traders in Nigeria’s informal economy, despite the proliferation of cooperative societies and microfinance institutions. This study examines how credit accessibility is structured through the social collateral model, with particular attention to the conditions attached to loan acquisition among women traders in Bodija Market, including women traders. Rather than evaluating the impact of credit on welfare outcomes, the study shifts focus to the entry requirements, governance mechanisms and risk management practices that shape who qualifies for loans and under what terms. Adopting a qualitative research design, data were collected through in-depth interviews, focus group discussions and key informant interviews with women traders, cooperative leaders and microfinance staff. Thematic analysis reveals that credit access is governed by layered social, behavioural and material conditions that substitute for conventional physical collateral. These include compulsory savings thresholds, sustained membership duration, regular meeting attendance, guarantorship requirements, shop and home inspections, business longevity, age restrictions and assessments of market reputation. Collectively, these mechanisms constitute social collateral. The findings show that while social collateral expands access beyond traditional asset-based lending, it simultaneously redistributes financial risk into social relationships and intimate spaces. Guarantors and group leaders bear liability for defaults, and borrowers are subjected to continuous monitoring. Also visible material stability influences loan size and approval. Consequently, women lacking strong networks, established market presence or demonstrable assets remain disadvantaged. The study highlights a paradox of conditional inclusion, a situation where credit facilities are available, yet accessibility remains socially stratified. The paper concludes that financial inclusion efforts in informal markets must move beyond expanding loan availability to critically examining the governance structures that define eligibility. More flexible and context-responsive risk assessment models are required to prevent structural inequalities under alternative collateral systems.

Keywords: Social collateral, Bodija market, Moral credibility, Credit acquisition, Asset visibility