‘Government need to embrace credit infrastructure to boost GDP growth’
By Industry experts in the financial sector have urged the federal government to take credit infrastructure very serious if she hopes to reduce poverty level in the country as well as increase GDP.
They opine that credit infrastructure entails creating an enabling environment for the citizens in the country especially small and medium scale enterprises having seamless access to credit.
Taiwo Ayedun, Founder, CreditRegistry, Lagos and father of credit reporting in Nigeria said the credit penetration in Nigeria is currently at about 7.8 percent which showed that Nigeria have a long way to go.
Ayedun stated this while delivering a lecture at a two-day workshop themed: Credit Reporting As the Foundation of Credit Infrastructure organised by Lagos Business School and Credit Bureau Association of Nigeria, CBAN in Lagos.
Speaking on the topic, Credit Reporting as a Foundation for Wealth Creation and Economic Growth in Nigeria, Ayedun observes that high interest rates in the country makes people not to actually perform on their loans and repayment behaviour of the borrower after taking the loan which made financial institutions to close avenues for loan.
He however said with the existence of a robust credit reporting system, financial institutions will be encourage to advance credit to this sector.
According to him, “An efficient, reliable and stable credit reporting system will among other things effectively stimulate access to credit, ensure transparency in loan application, condense the rate of bad or non-performing loans and obviate the need for collateral.”
He also added that a sound credit reporting system also creates a sense of obligation on borrowers as they will note that a bad credit history reduces the possibility of further accessing facilities.
Listing other advantages of credit reporting, Ayedun said it leads to broader and fairer access to credit, better performing loans, prevent over-indebtedness as well as improve profitability and stability in financial sector.
To further increase access to credit in the country, the expert said government especially at the state level need to make title registration for homes and certificate of ownership cheaper to get so that owners can use it as collateral for loans and there will be more loans in the system.
Tunde Popoola, chairman, Credit Bureau Association of Nigeria, CBAN and managing director, CRC Credit Bureau Limited said the Bureau had changed the behaviour of people, that now people are force to pay their loan and also bar bad people from accessing the system.
On the future of credit reporting in the country, he said the association hope for more adoption of the system in the country.
Popoola however said for the work of the bureau to show in the country there was the need to have National Unique Identifier.
Earlier in her remark, the workshop coordinator, Ebelechukwu Enedah said Nigeria is at that point where workshop like this has become very relevant to the development of her financial services sector and overall economy.
KELECHI EWUZIE