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CRC Credit Bureau: Stiring retail lending, NPLs

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COMFORT EKELEME, Asst. Business Editor 

Over the last 10 years of its existence as a Credit Bureau Company, CBC in Nigeria, the CRC Credit Bureau Limited has made significant impact in the nation’s financial services sector.

Before the advent of credit bureau companies in Nigeria, nationwide information repository on credit profiles of corporate entities as well as consumers was not available, thus leading to high level of default in loan repayment.

For instance, Non-Performing Loans (NPLs) constitute one of the most serious liquidity challenges facing the Nigerian banking sector. Bank loans are regarded as risk assets because the monies advanced as loans by the banks belong to depositors. The risk arises in the event of massive defaults and makes it difficult for depositors’ monies to be available on demand.

Meanwhile, the National Bureau of Statistics (NBS) had in its September 2019 report said that Non-Performing Loans in Nigerian banks dropped to a record N1.44 trillion in the second quarter of 2019. This is reflected in the banking sector report released by the bureau.

According to the Bureau’s report, NPLs in Nigerian banks dropped to a four-year low of N1.44 trillion in the second quarter of 2019 from N1.93 trillion. This suggests in one year, banks recovered N496.22 billion NPLs which some industry analysts attributed to the activities of credit bureau companies in the country.

The latest drop in NPLs to a single digit, the report said makes it the first time percentage of non-performing loans to total gross loans dropped to a single digit since the fourth quarter of 2015.

Although there are other licensed credit bureau institutions in the country, stakeholders present at company’s 10th anniversary recently held in Lagos were of the view that the coming of CRC Credit Bureau Limited has greatly contributed to the successes recorded so far in the sub-sector.

On retail lending, Credit Bureaux have contributed to the boom in retail lending by reducing time to costs, improving credit character and recovery, and enhancing accessibility to finance for SME borrowers.

It is also on record that there have improvement in credit character and enhanced recovery and borrower’s behaviour has been equally been shaped by the knowledge that lenders will share information of their creditworthiness and current borrowing exposure with each other, and that this information can determine their future access to credit and cost of finance.

Also, improvement in credit character has reduced the risk of default, while recovery are enhanced.

In his speech at the 10th anniversary celebration of CRC Credit Bureau Limited, its Managing Director, Tunde Popoola said in the last ten years the company has strive to live up to its vision and mission by developing innovative products/services and entering strategic partnerships that have enhanced access to credit for consumers and Micro, Small &Medium Enterprises (MSMEs).

He said, the theme “Providing Insight; Enabling Growth” was chosen to celebrate the company’s journey, the impact and value brought to the credit reporting industry and the Nigerian economy as a whole.

According to him, “At CRC, we set for ourselves the vision to set standard for financial empowerment and informed decision making and a mission to deliver innovative products and services that enable our stakeholders make informed decisions and build credible profiles that enhance access to credit for strategic growth.

“In the last ten years we have strive to live up to the vision and mission by developing innovative products/services and entering strategic partnerships that have enhanced access to credit for consumers and Micro, Small &Medium Enterprises (MSMEs). We are providing insight and making it easy for businesses to take decisions with confidence and trust. We are celebrating these milestones, to showcase the impact we have made in the country.

“CRC prides itself as an intellectual organisation and this is why the celebration is in the form of a lecture and public discourse. We thank God for what he has helped us to achieve in the last ten years of our operation as a credit bureau company in Nigeria. We have been driven by passion to deliver to Nigerians. We have the support of the Central Bank of Nigeria, CBN, we have the support of our international partners, especially the International Finance Corporation (IFC).

“We are grateful to the federal government of Nigeria for creating the opportunity to have credit bureau in Nigeria and the opportunity to also have the National Reporting Act that was enacted in 2017. We never had the experience of credit bureau when we started but now, we are gurus in credit reporting,”said.

Moving forward in the next ten years, he said their aim is see how to move faster, provide opportunities for every Nigerian to have access to credit.

He said, “Time will come when every Nigerian will have opportunity to have credit scores, we are going to work more on our credit score application, to ensure that we use alternative data to also give opportunity to those who have never borrowed before to have credit scores. We want to enable Nigerians to have access to credit everywhere and we want to be able to build profile of SMEs.

“At the end of the day, we want every Nigerian to know and guide jealously their identity, their credit history and their credit report. When we arrive at that, it means that in few seconds, Nigerians can have access to credit, it means credit penetration can then move up to 100 per cent, it is just about 50 per cent as we speak today, when we get to that level, everybody will be on course. By the next few years, we want credit bureau penetration to also be more than 100 per cent, which means every Nigerian will have a credit score.

“The whole essence of the credit mobile is to democratize access to information, people have been operating in the Nigerian financial system and there are issues in their account and they do not know, with this credit mobile, people can have access on their phone to all the information the banks have about them, and if there are issues, they can quickly go and correct them before they can even make themselves available for credit.

“They can know their credit scores, if your credit score is low you can’t get loans. If there is no information, people will be operating in the dark and our job is to ensure that we do not operate in the dark any more when it comes to access to credit in Nigeria.

“We expect it to deepen access to credit; we expect it to increase the number of people who are granted loans. A lot of people are refused access to loans now because they do not know that they have bad credit history but when you have access to your information through the CRC mobile, you can then go and find out what is happening, sometimes, it may be wrong information on your account, sometimes it is the fact that your account has been abandoned or that something went wrong somewhere and you are not just aware,” he stated.

CRC Credit Bureau Limited, a private limited liability company duly incorporated and licensed under the laws of the Federal Republic of Nigeria was established by a consortium of ten leading financial institutions and Dun & Bradstreet with the purpose of delivering credit bureau services in Nigeria, and got licensed by the Central Bank of Nigeria (CBN) in June 2009 and commenced live operations the same year.

The company provides a nationwide information repository on credit profiles of corporate entities as well as consumers, thus improving the ability of credit providers to make informed lending decisions.

Also, it is a leading credit bureau company in Nigeria with the credit information of over 95 per cent of the Nigerian credit industry covering commercial banks, non-bank institutions, retailers and utility service providers.

Access to its credit information database enables creditors to effectively assess the credit worthiness of new and existing customers for credit offers while taking advantage of the technology-driven product offerings to develop new credit products.

In effect, CRC has assisted in generating growth in loans both to consumers and commercial entities and stimulated the emergence of new loan products and services. It has also improved the quality of credit offered and loan processing through the introduction of customer profiling and loan monitoring.

CRC has also impacted positively the financial environment in Nigeria by making substantial contributions to access to credit and the change in the business models of lending.

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