• Thursday, July 25, 2024
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Nigeria records improvement in credit penetration — Credit Bureau boss

Nigeria records improvement in credit penetration — Credit Bureau boss

Nigeria has witnessed remarkable progress in credit penetration over the past 15 years, largely due to the activities of CRC Credit Bureau Limited, according to Tunde Popoola, group managing director/CEO of the company.

Speaking at the CRC Finance and Credit Conference 2024 in Lagos, Popoola highlighted the advancements and ongoing challenges in the country’s credit landscape.

The conference, themed, “Sustainable financing options: Innovations in credit risk management,” also marked CRC Credit Bureau Limited’s 15th anniversary. In his address, Popoola emphasised the substantial growth in credit scores among Nigerians but noted that the progress still falls short of global standards.

“Only 33 million Nigerians have their credit scores on the CRC database,” Popoola said, adding that “29.4 million searches were conducted in 2023, and more than 10 million in the first quarter of 2024 alone.

“CRC has expanded from one product in 2010 to 18, spanning all lending value chains,” he added.

Popoola acknowledged the significant strides made by the CRC Credit Bureau and the Central Bank of Nigeria (CBN) in improving credit access. “Many millions of Nigerians can now secure loans through their phones, with lenders relying on CRC’s data,” he said. “The Credit Reporting Act of 2017 and CBN’s support have greatly enhanced credit penetration.”

Reflecting on CRC’s journey, Popoola recalled, “15 years ago, CRC received its licence from the CBN. Since our launch in January 2010, we have aimed to ease credit access in Nigeria. We started with credit reports and have since introduced various other products, though adoption remains limited.”

Joel Owoade, chairman of CRC’s board of directors, who addressed the economic challenges facing Nigerian companies, said, “Economic fluctuations have severely impacted profitability, with many firms reporting unprecedented losses up to Q1 2024.”

Owoade proposed sustainable financing as a solution, emphasising the importance of risk management to mitigate bad loans. “Sustainable financing is crucial for economic stability,” he asserted.

Olaniyi Yusuf, managing partner at Verraki, discussed the implications of artificial intelligence (AI) on the economy. “Global inequality should be our primary concern in the AI-driven fourth industrial revolution, not job displacement,” he argued. “Rather than a net job loss, AI is expected to create more jobs. Nigeria needs a regulatory framework that supports AI without stifling innovation.”

Adetona Adedeji, acting director, CBN’s banking supervision department, highlighted the need for sustainable credit practices. “With only 14 percent credit penetration, our economy still has a long way to go,” he noted. “Credit must be sustainable and revolving to truly benefit the economy.”

Adedeji, represented by Olubunmi Ayodele, an assistant director of banking supervision, outlined the apex bank’s initiatives to promote sustainable credit.

“We have mandated other financial institutions to provide credit reports and established the National Collateral Registry and Global Standing Instruction to enhance credit access,” he explained. “A good credit score can help borrowers secure lower interest rates, providing a comprehensive view of the borrower to the lender before transactions.”

As Nigeria continues to develop its credit infrastructure, the efforts of CRC Credit Bureau and the CBN remain crucial in driving further progress and achieving global standards in credit penetration.