‘Access to right credit, price crucial for economic emancipation’
Stakeholders in Nigeria’s financial sector have canvassed that access to the right credit, and at the right price is crucial for economic emancipation and posterity of the nation.
According to the experts, despite the pressures to support business decisions in the economy and encourage services that enable creditors to process transactions with confidence, a lot still needs to be done.
Specifically, Chairman, Board of Directors, CRC Credit Bureau Limited, Gregory Ovie Jobome, said although Nigeria has attained a significant achievement by moving credit penetration from a mare four to 14 per cent, it is still very far from what it could achieve.
Speaking at an event to mark the 10th year anniversary of CRC Credit Bureau Limited, in Lagos, he said opportunities in the sector remain huge, noting the importance of the credit bureaus to continue pushing Nigeria to achieve what the most advanced countries have attained years back.
He said: “As we intensify our efforts and as the government supports our industry through appropriate legislation and policies, we look forward to the future through optimism.”
He maintained that to attain increased credit penetration in Nigeria, and make access to funding easy for Micro Small Medium Enterprises (MSMEs), the National Identification Number (NIN), could be a key instrument.
He noted that NIN, which serves as a unique identifier for every Nigerian, could also serve as a tool for boosting the credit scores of MSMEs, and also help individuals to access credits easily.
In her remarks, Deputy Governor, Financial Systems Stability, Central Bank of Nigeria (CBN), Aishah Ahmed, noted that despite the policy initiatives of the apex bank, businesses especially the MSMEs and individuals have continued to experience difficulties in accessing credit.
However, she said the CBN would continue to support initiatives that encourage lending to the real sector of the economy. “There is a huge expectation of synergy between the CBN and the relevant institutions within the financial system to change the narrative and improve access to credits,” she said.
In his remarks, Chairman, Federal Roads Maintenance Agency (FERMA), Tunde Lemo, said lack of a good financial reporting system affects businesses and limits access to credits, as creditors, assume that the borrower won’t be able to pay back.
According to him, financial reporting has helped drive financial inclusion and increased credit penetration through the use of unique identifiers in the banking industry, which brought in the opportunity of individuals having credit scores.
He maintained that NIN could be used to access every individual’s credit score to know his ability to pay back small loans like borrowed airtime and mobile data, through the use of algorithms to know if they qualify for bigger loans.
Meanwhile, Country Manager, International Finance Corporation (IFC), Eme Essien Lore, said a strong, vibrant, dynamic, and sustainable private sector is key to achieving growth in access to credit.
According to her, Nigeria is known around the world for its strength in entrepreneurship, but there are enormous constraints to the private sector growth in the country. She stressed the need to enable the private sector to play its role to help the country address key development issues.
Her words: “Access to finance and credit has been an enormous constraint to the private sector, as it has become one of the issues affecting MSMEs. We know the role of access to finance and credits can play in helping MSMEs.
“We need to do a lot of work, and we need to do them as a matter of urgency. Nigeria is almost behind all its peers in every single dimension, and needs to promote scalable private sector investments like in other developing countries.”
According to her, Nigeria has about 41 million MSMEs accounting for 75 per cent of the jobs in the economy, noting that 50 per cent of the problems surrounding businesses in the country would be solved if access to credit is made easier for MSMEs.