A credit rating expert has urged the relevant authorities to develop a viable credit bureau system for economic development as no country can run only on cash, maintaining that Nigerians must work hard to develop its credit bureau to enable financial institutions to avail individuals and organisations credit facilities.
Managing Director and Chief Executive Officer (MD/CEO) of Credit Bureau Reporting (CBR), Dr. Tunde Poopola, stated this yesterday, while speaking with online and business correspondents in Lagos.
He said the country had remained underdeveloped because it failed to develop viable credit system, adding that no person or organisation has all the required funds at all times.
He said deposit money banks (DMOs) were reluctant to give credit facilities to most Nigerians, because the banks do not have adequate information on them, adding that in the past, banks do not share information leading to bad loans, but with a robust credit bureau reporting in the country, issues of bad debts have reduced.
“In a society with good credit bureau, you don’t need to know anyone in a bank to get a credit facility. With the improvement in our national identify cards, Nigeria has improved its means of identification.
“As of March 2022, only 77.3 million Nigerians had been registered with the National Identity Management (NIM), meaning that only about 33 per cent of Nigerians have been captured and are known by the system,” he said.
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He also identified low process of the country’s judicial system as a major impediment to an effective credit system, adding it takes a long time for the courts to adjudicate legal issues. Poopola also identified the country’s low financial inclusion, insisting that only about 40 per cent of Nigerians have bank accounts and that only such persons could access credit facilities.
The CRC boss lamented that the agriculture sector’s contribution to the Gross Domestic Product (GDP) was only about 21 per cent, which was why the sector could only get about only three per cent credit facilities. He disclosed that records showed that Nigeria has about 41 Micro, Small and Medium Enterprises (MSMEs), noting that less than five per cent had accessed credit facilities.
Poopola equally pointed out that the country’s oil and gas sector’s contribution to the GDP was less than 10 per cent, yet the sector has access to about 23 per cent of all available loans. He also argued that the growth in credit bureau would lead to improvement in the country’s economy and that the country was in dire need of facilities and policies to grow the credit bureau system.
Poopola said the Federal Government, the Central Bank of Nigeria (CBN) and Consumer Protection Council (CPC) were doing a good job in their efforts to improve the country’s credit system, but that they needed to do more.
He enjoined the government to tackle fraudulent individuals that give loans at high interest rates and keep on harassing the debtors and innocent Nigerians on their telephone lines. “There are some faceless individuals or firms that go about granting credit facilities, whose interest rates make very difficult to repay. Some of those guys keep on sending SMS messages to all the people on the telephone contacts of the borrower to threaten them.
“These people are disasters and so, the government should go after them or they will destroy all government efforts to move the country forward,” he added. He urged Nigerians to get their credit rating if they wish to get credit facilities and pay their outstanding credit facilities as agreed without any excuses if they hope to continue getting loans in future.
He said those who have not accessed credit facility from any financial institutions before could be accessed through their social media presence and other records by the financial institution so that they could apply for credit facility for the first time. Poopola also disclosed that the country currently has three firms in credit bureau reporting.
