CBAN Bemoans Low Access to Credit

By Peter Uzoho

Micro, small and medium scale businesses (MSMEs) and individuals in the country are constantly faced with difficulties in accessing credits from financial institutions to either grow their businesses or improve
their livelihood, despite the country’s huge population.

The Chairman, Credit Bureau Association of Nigeria (CBAN) and Managing Director of CRC Credit Bureau, Mr. Tunde Popoola, disclosed this in Lagos, at the fifth National Credit Reporting Conference,
with the theme: ‘Expanding the Frontiers of Access to Credit in
Nigeria.’

He said only less than 15 million persons/entities had enjoyed at least one form of credit from formal banking institutions, despite the country’s population of over 190 million people.

Popoola revealed that the entire bank loans to consumers at any given time in a month, was always less than N1trillion.

He said, “Each of the three licenced credit bureau today has an average repository of about 20 million records of credit data from institutions across various sectors of the economy including but not limited to commercial banks, microfinance banks, mortgage banks, retailers, cooperatives, finance companies, leasing companies, etc.

“In view of this phenomenon, credit bureau coverage remains low in Nigeria at eight per cent, compared with 64 per cent in South Africa, 25 per cent in Egypt, and 17 per cent in Ghana.

“We need to urgently change the narrative of credit concentration and increase access to credit.”
Popoola, explained that credit reporting expands access to finance,
especially for consumers and MSMEs and plays a key role in improving
the competitiveness and efficiency of credit granting institutions by reducing credit processing costs and time.

According to him, the availability of credit information therefore, implies a more efficient allocation of credit at lower interest rates, accompanied by higher economic growth and a more diversified credit distribution.

He urged the federal government to speedily implement a unique identity card for every Nigerian.

In her remark, the Chairman of the occasion and Minister of State for Industry, Trade and Investment, Hajia Aisha Abubukar,  said the theme of the conference underscored the bring stakeholders together to discuss the importance of credit infrastructure and its policy guidelines, legislation,  accessibility, security and trust, as a tool for economic growth.

On his part,  Director, Banking Supervision,

CBN, Mr Ahmed Abdulahi, said all stakeholders in both financial and non-financial sector have a role to play to attain more financial inclusion and improve the economy of the country.

Represented by his Deputy, Mrs Elizabeth Fasoranti, Abdulahi stressed
that the signing of the Credit Reporting Act of 2017, marked the beginning of a new era for credit information sharing amongst credit bureaus, banks and other institutions that provide services on credit.