Movable asset scheme key to credit creation, says FITC
The Financial Institutions Training Centre (FITC) has said that the move to entrench the use of movable assets in financing, as opposed to fixed and huge collaterals, would have a positive impact on the economy.
But reemphasising the need to get the initiative right, FITC said that as the next level of credit management, it would be nice if people can aspire to acquire properties and basic living items and can present a credit report individually, to have access to credit.
The Managing Director/Chief Executive Officer of FITC, Lucy Newman, who made the observations, while receiving the “Credit Management Director of the Year Award” by the Institute of Credit Administration (ICA), also harped on the need for cash-flow lending system.
ICA said it had followed Newman’s career development and exceptional contributions to the development of credit business in Nigeria and commended her passion for professional credit management practices, which has led to the growth of credit economy and the recognition given to her.
“ICA’s yearly Nigeria Credit Industry Awards is a significant event that reflects integrity, professionalism and excellence in the management of all sides of credit business from commercial, consumer through government-driven credit schemes for social economic empowerment,” the institute said in a statement.
Meanwhile, Newman has espoused the benefits of moving from a collateral lending to cash-flow lending, saying that collateral lending is restrictive because when someone does not have collateral, the person is automatically excluded.
“But if you go through the cash-flow lending, which will be the next level of credit and automation, you do not need to talk to anybody. You can just submit your report and it will tell if you are qualified to get credit or not within few minutes.
“That will be nice and given our population, that is the way to go if we really want to deal with the poverty issues. However, we have a problem, the biggest enemy for credit- discipline and commitment.
“When people give credit, it is not that the money is free. Somebody is paying for that credit. So, those who take credit should also honor their obligations and pay back. It is when they payback that the next person can borrow”.