In the last Ease of Doing Business report of the World Bank, Nigeria performed better, particularly in the area of access to credit. Although actual credit to the private sector is yet to be reflective of the ratings, operators in the financial industry believe that while the country is on the right direction, more is still needed to be done to improve access to credit.
The country ranked 145th position out of 190 countries in the Ease of Doing Business index for 2018, indicating that Nigeria had moved up by 24 points from 169th position on the 2017 ranking and also 170th position on the 2016 ranking to 145 in the World Bank’s 2018 report.
Nigeria made the greatest stride in improving access to getting credit, where it moved from 32nd position in 2017, to sixth position in 2018. According to the report, Nigeria strengthened access to credit by adopting a new law on secured transactions and establishing a modern collateral registry allowing access to credit with the use of moveable collateral.
The country also improved access to credit information by guaranteeing borrowers the legal right to inspect their credit data from the credit bureau and by starting to provide credit scores to banks, financial institutions and borrowers.
Presently, there are three credit bureaus in the country proving the credit history and credit ratings of individuals and corporates to financial institution for the purpose of making informed decision in granting credit.
Minister of State, Ministry of Industry, Trade and Investment, Hajia Aisha Abubakar, speaking at the fifth National Credit Reporting conference in Lagos at the weekend on the importance of credit bureaus in the country noted that they are essential to improving financial inclusiveness in the country.
She said, “In our effort to achieve milestones in financial inclusion and improve the Nigerian economy, several other economic and credit sector reforms have to be initiated to suit our demographics.
“The existence of the Credit Bureau Industry is a crucial financial infrastructure that should be utilised in improving the financial literacy of our economy as the availability of credit information to all sectors is a life wire.
“It is worth noting that the elements of credit information should not be limited to financial data alone as the provision of alternative data by non – financial institutions is relevant in assessing the creditworthiness of those who require credit. Hence, the presence of stakeholders in the non – financial sectors in this event to discuss common grounds for data exchange/sharing is definitely a step in the right direction.’’
According to the chairman, Credit Bureau Association of Nigeria (CBAN) and managing director of CRC, ‘Tunde Popoola, with the enabling environment provided by the government and the CBN’s strong regulatory framework in place, it behooves the credit granting institutions to do more.
“Access to credit by MSMEs and consumers in Nigeria is still very low. Despite the country’s huge population of over 190 million people, less than 15 million persons and entities have enjoyed at least one form of credit from formal banking institutions. In addition, the entire bank loans to consumers at any given time in a month is less than a N1 trillion.”
He noted that available data indicates that of the total value of credits in the financial services sector as of June 2018, corporate entities which represented about 10 per cent of the credit subjects assessed 94 per cent of the loan value.
As the existence of credit bureaus are largely dependent on data, he called on financial institutions in the country to ensure that they provide the required data on creditors. The three bureaus currently has an average repository of about 20 million records each of credit data from institutions across various sectors.
However, Popoola said “timely and accurate data is very key to having credible information through the credit bureau system. It is like what people say, garbage in garbage out. If you put wrong information in, then you get wrong information output.
“We want to encourage lenders and creditors generally who are submitting credit information to credit bureau to ensure that the information that they submit is accurate and complete and it is timely. Because if you are getting an information about what has happened three months ago no, then it doesn’t make sense. It is not going to serve that purpose. We want information that is as timely as possible and very close to reality.”
Likewise, managing director and chief executive of Credit Registry Services, Jameelah Sharrieff-Ayedun stressed the importance of data to credit bureaus. To her without the required information, the financial industry will be a ticking time bomb.
“One thing that we are going to continue to reiterate is the fact that institutions should report information to the bureau. We are looking for correct information, complete information and current information. When that information is not properly reported to a bureau by whether a financial institution or a non-financial institution, they are literally a time bomb to the financial credit sector.
“So it is so important that every institution report to all three bureaus. Let us make sure that the information is there for anyone who chooses to access it otherwise we are creating a time bomb in our financial institution,” she stated.
- Deaths Averted As Petrol Tanker, Truck Collide On Lagos-Ibadan Expressway
- Tonto Dikeh Organises Walk Tour For Elimination Of Drug Abuse, Human Trafficking
- Kaduna Govt Spends N142.9bn On Basic Education In 4 Years
- Kano Govt Budgets N119m To Tackle Flood
- NAF Neutralises Insurgents At Tumbun Hamma In Borno
Plantain: Remedy For Kidney, Bladder Problems
Research has shown that plantains are rich in vitamins and minerals that contribute to good health. It is famed to...
Aloe Vera For Hair Health, Wounds Healing, Others
Since ancient times, the aloe vera plant has been used around the world to treat a number of ailments. Ancient...
Russel Carrington Wilson
Russell Carrington Wilson is a 31 year old American football player for the Seattle Seahawks of the National Football League...
Every Woman Is A Queen – Mary Kanu
Mary Kanu is the brain behind the fast growing beauty home Mauchiqueen Beauty Planet. She speaks with MILLICENT AREBUN ONUOHA...
I Break Barriers To Succeed – Fatima
Fatima Yusuf Giwa from Akwanga local government area of Nasarawa State is the last child of her family. She was...
Internet Fraudsters Riding Roughshod On Nigerian Music’s Image
SAMUEL ABULUDE writes on Nigerian music, its charm, essence and need to rid it off internet fraudsters and bad image....
NEWS22 hours ago
Justice Has Prevailed In Zamfara – Atiku
CRIME22 hours ago
NYSC Member Jailed, Others Arrested As EFCC Goes After Fraudsters
NEWS22 hours ago
Edo Residents Laud Obaseki On Road Projects
NEWS21 hours ago
MURIC Decries Handling Of Gen. Alkali’s Murder Case
NEWS22 hours ago
Zamfara Gubernatorial Tussle: PDP Govs Congratulate Mutawale
NEWS22 hours ago
Supreme Court Ruling On Poll: Justice Prevailed in Zamfara – Atiku
SCIENCE TECHNOLOGY23 hours ago
NITDA Regulates IT For Sustainable Devt – DG
WORLD24 hours ago
US, Japan, Others Hold First Naval Drills In Western Pacific