Dike Onwuamaeze and Nume Ekeghe
The Managing Director/Chief Executive Officer, CRC Credit Bureau Limited, Mr. ‘Tunde Popoola, said the presence of credit bureaus promote strong credit systems which in turn promote a productive economy by encouraging credit to SMEs and enhancing quality of life to people.
In addition, he pointed out that a strong credit system is usually have a strong credit risk management system (CRMS) to fill the trust gap with reliable information.
He said this yesterday at the bi-monthly forum organised by the Finance Correspondents Association of Nigeria (FICAN), with the theme:
‘Stimulating Economic Growth through Improved Access to Credit.’
He said the operation of the credit bureaus and credit rating agencies have boosted access to loan to the Nigerian private sector by more than 100 per cent in the past 10 years.
The CRC Credit Bureau boss also stated that the emergence of credit bureaus has led to a reduction in the level of non-performing loans in the Nigerian banking industry from 32.8 per cent in 2009, to 9.3 per cent in 2019.
Popoola said: “Nigeria licensed three private credit bureaus in 2009 and their impacts on the volume of loans and reduction in the rate of non-performing loans (NPLs) have been remarkable. Loans to the private sector rose from N7.7 trillion in 2008 to over N12 trillion in 2015 and N16 trillion in 2019.
“Special credit products for small and medium scale enterprises (SMEs) and the introduction of credit cards became possible with the advent of credit bureaus. Furthermore, NPL ratios declined significantly from about 32.8 per cent in 2009 to a single digit of 9.3 per cent as at June 2019.
“The healthy loan portfolios were made possible, among other factors, by the presence of private credit bureaus and the establishment of the Asset Management Corporation of Nigeria (AMCON).”
He also emphasised that access to SMEs remained pivotal to the economic growth of the country as the SMEs are the largest contributors to Nigeria’s GDP
“The challenge of access to credit confront consumers and SMEs much more than the large enterprises. Large firms have easy access to credit.
“But to stimulate economic growth, reduce poverty and engender prosperity, there must be significant improvement in access to credit and other forms of finance for consumers and SMEs.”
“It is instructive to note that government interventions through grants, subsidies and other special arrangements and incentives will help, but they cannot unleash the required exponential access required to stimulate economic growth. The focus has to be more on policies and programmes that provoke market-driven initiatives.”
He also said his firm has played a significant role in the reduction of access to credit for consumers and MSMEs.
“When CRC commenced live operations in 2009, it had only six commercial banks which invariably successfully submitted credit records.
“Today, CRC has about 1,500 institutions with over 33 million credit records successfully processed. In effect, over 1,500 corporate entities use the services of the company, cutting across all types of financial institutions, insurance companies, telecommunications, electricity distribution (discos), cooperative societies, pharmaceuticals, retailers, conglomerates, travel and hospitality businesses etc,” he said.