ICA seeks improved credit opportunities for Nigerians
The Institute of Credit Administration (ICA) has called for improved access to credit in monetary and trade terms, to boost export of made in Nigeria goods and grow the economy.
However, the institute decried poor attitude to credit, especially to public loans provided by government’s Development Finance Institutions (DFIs) and lack of robust regulatory regime for the DFI sector to operate as fundamental threats to the health of the credit economy.
President and Chairman ICA, Tunji Oyebanji, while speaking at the inauguration of the new Governing Council of ICA, said the institute was created to foster development of credit management in Nigeria and Africa, and to ensure that standards are set based on best practices in professional and ethical conducts, as well as provision of services geared towards enhancing skills and capacity building of those involved in credit functions.
Oyebanji urged the government to be committed to enhancing the regulatory regime as well as credit regulations by providing more protection for DFIs.
He also stressed the need for Nigeria to engage in free market economy to achieve remarkable overall resilience in economic activities, employment and fiscal performance.
“In today’s globalised economy, the need to advance credit to businesses and individuals and managing credit risk has taken on a much bigger dimension. In spite of this, the business community still lacks proper commitment towards the culture of honouring credit obligations.
“In an environment of heavy and persistent national deficits and borrowings, inflationary pressures are bound to surface and negatively impact the available money supply which otherwise be deployed for productive investment and consumption,” he added.
He explained that the shortage of cash in the system has amplified the demand on banks to create more money through loans and advances.
Oyebanji noted that as demand for credit had long increased, businesses were expected to participate in the credit creation mechanism through deferred payments and credit terms granted to their customers.
He pointed out that under these economic and financial realities, competition has also driven businesses to improve and compete not only on quality and price, but more significantly so on the credit terms they provide. Businesses today are using generous credit terms as an effective tool to gain a competitive advantage.
“This is so only if they are managed effectively, if poorly managed, credit terms could lead to a disaster. These considerations amply demonstrate that credit management cannot be more relevant than it is today. With this view in mind, the ICA is encouraged to focus its attention not only in the interest of its members, but also on the macro aspect of strengthening and sustaining our national economic development effort,” he said.
Also, the Registrar/Chief Executive Officer of ICA, Prof. Chris Onalo, said the power of credit economy, among other factors, include to create wealth and jobs; infrastructure necessary for sound credit system; business characters that encourage credit availability; government initiatives that facilitates access to credit; and non-default in credit obligations.
according to him, others include identifying and advocating removal of barriers against access to company information needed for credit business decision; legal issues in credit; consequences of credit abuse; and uneconomical treatments by big companies.
He stressed that these are the issues that the governing council of ICA, to be headed by him, would focus on throughout the tenure.
Onalo said the third governing council inauguration was necessitated by call for more professionalism, ethical standards and sustainable credit to reap the associated economic benefits at both in the organisation level and the economy.
“With this national interest in mind, it is certain that the present and future governments will continue to acknowledge and support ICA’s contribution to the development of credit economy,” he added.
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