Sekibo: Poor Identity Management Greatest Barrier to Lending

Ifiesimama Sekibo

Dike Onwuamaeze and Nume Ekeghe

The Managing Director of Heritage Bank, Mr Ifie Sekibo has identified poor identity management as the greatest hinderance to boosting access to credit, especially for small and medium scale enterprises (SMEs) in Nigeria.

Sekibo, stated this while speaking as a guest speaker, at the Finance Correspondents Association of Nigeria, (FICAN) annual conference held in Lagos at the weekend.

Represented by Divisional Head, Strategy and Business Solutions, Mr Segun Akanji, Sekibo said the dearth of effective and standard identity management infrastructure makes access to credit for the SMEs in Nigeria tough as banks only see unmitigated risks.

“I am talking about identity management challenge. That is the biggest collateral to lending and that is what is missing in this economy. 

“The day banks can verify where you live, everybody will get loan with ease, because you cannot run away,” he stated.

According to him, there is no need for customers to provide collateral to a bank if the financial institution knows where the customer resides. 

“But the problem is this, I don’t know where you live. The address of the company is not where you live. And you can wake up in FESTAC today, but tomorrow you move to Ajangbadi or Victoria Island. 

“You don’t have to tell me. And that is a huge problem for banks,” he said.

He noted that the problem was that “there is no value in our identity management as we have it. So, it is not just about banks, it is about the holistic structure where there is no value to the person that each of us will represent.”

He gave instances about developed economies such as the United States where if one changes accommodation, they must notify all relevant institutions that they deal with because of the inherent value in the system. 

Sekibo also observed that although the banks had pushed the government to some form of identity management system through the bank verification number (BVN), it has not been enough to solve the problem of the identity constraining lending in the country.

“You can argue that the banks have driven the government to some identity management system through the BVN, but the problem is that the infrastructure that will keep everybody in the homes where they live and not just change is non-existent. 

“People take a loan from banks and change accommodation, run away to Ibadan and you cannot find them. That must change. 

“But how do you do that? It is very simple. All the benefits that are allocated to you as a person, the day you relocate like that, you are as good as dead. 

“Like when you live abroad, once you misbehave with your identity, you cannot bank, your credit goes bad, you cannot go to hospital and everything else goes bad and you cannot do anything. 

“So, you have a responsibility to yourself and the country that supports you to report yourself.”