• Wednesday, February 28, 2024
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FG moves to improve consumer credit in Nigeria

Again, FG postpones kick-off date for students loan scheme to March 1, 2024

The Federal Government has established a Technical Working Committee to consider measures to enhance consumer credit in Nigeria.

The establishment of the Committee by the Presidential Council on Industrial Revitalization is a timely and strategic initiative aimed at investigating the present state of consumer credit in Nigeria, identifying the challenges faced by both consumers and financial institutions, and proposing a coherent regulatory framework that can significantly improve the consumer credit landscape.

According to a press statement signed by the Media Unit, Minister’s Office, Ministry of Industry, Trade and Investment, the committee will be chaired by Olawale Edun, Minister of Finance and Coordinating Economy, and he will be assisted by Doris Uzoka-Anite, Minister for Industry, Trade and Investment, as well as Bosun Tijani, Minister for Communications, Innovations, and Digital Economy.

”An efficient consumer credit system is a highly essential component of successful economies, as it works to improve market efficiencies and fill in gaps in consumption and productivity by providing consumers immediate access to credit, allowing them to purchase ahead of ability.

‘’The absence of a well-structured consumer credit system has been a significant impediment to financial inclusion and economic prosperity,” the Trade Minister said at the inaugural meeting held earlier in the week.

Read also:Harnessing consumer credit for made in Nigeria; products — A catalyst for economic growth

Nigeria has numerous financial institutions and credit schemes, but many Nigerians still face substantial hurdles in accessing credit due to stringent eligibility criteria, high interest rates, a lack of awareness or understanding of credit processes, and inadequate credit available for lending.

Members of the committee at the inaugural session identified some major issues to be tackled to achieve a sustainable consumer credit framework.

The committee draws its members from the Central Bank of Nigeria’s (CBN) National Identity Management Commission (NIMC), the National Insurance Commission (NAICOM), the National Institute of Credit Administration, the Federal Competition & Consumer Protection Commission (FCCPC), and the Bank of Industry (BOI), among others, and agrees on a five-month timeline to achieve various objectives, including promoting inclusivity and improving access to finance.

The specific objectives of the Committee include increasing consumer credit uptake in Nigeria, enabling a sustainable credit system for the country in line with global best practises, and enhancing the supporting infrastructure (technology, data, financial institutions, and global partners) to boost credit operations and equip players in the industry.

In delivering on this objective, the Committee has adopted a holistic consultative approach that draws on the experience, knowledge, and expertise of the credit system ecosystem in understanding the issues within the industry and defining workable solutions to addressing them.

Additionally, the committee seeks to address issues of corruption to foster economic growth. To achieve these goals, the committee will focus on developing a policy framework, harmonising data, and enhancing both institutional and legal frameworks to achieve success.