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Nigeria needs unique identifier to boost access to credit

 COMFORT EKELEME

To stimulate economic growth, reduce poverty and engender prosperity in the country, Managing Director/Chief Executive Officer of CRC Credit Bureau Limited, Mr. Tunde Popoola, has urged the Federal Government to speedily implement a unique identifier for every Nigerian.

This is even as he noted that the Bank Verification Number (BVN) introduced by the Central Bank of Nigeria (CBN) does not fully solve unique identifier challenge as data providers have been unable to fully provide BVN s for legacy accounts.

Speaking Wednesday in Lagos, at the Finance Correspondents Association of Nigeria (FICAN) Bi-Monthly Forum, with the theme, ‘Stimulating Economic Growth through Improved Access to Credit’, Popoola noted 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.

Stressing the need for a significant improvement in access to credit and other forms of finance for consumers and Small and Medium scale Enterprises (SMEs), Popoola said  the country has multiple forms of government issued identifiers for individuals including National Identity Card, Bank Verification Number (BVN), drivers’ license, voter’s card and international passport.

He ,however, noted that in most countries, with successful Credit Bureau infrastructure, there is always one single means of identification.

“In Europe and America, it is the social security number. In a country like Egypt, it’s the National Identity Card. India commenced deployment of unique identifier in 2009, today about 1.1billion Indians out of a population of 1.3 billion have government issued unique identification numbers. Nigeria also needs to embrace a unique identifier.

“The current situation makes data matching very tedious, cumbersome and expensive for the bureaus. This is because a bureau relies on identification of data subjects to be able to match and merge data and develop innovative products for the market. We, therefore, urge the government to speedily implement a unique identifier for every Nigerian. It is pertinent to note that the BVN introduced by the CBN does not fully solve unique identifier challenge as data providers have been unable to fully provide BVN’s for legacy accounts. I am aware of the efforts of the National Identity Management Commission (NIMC), but we can and need to speed up the coverage of the country.

“Unique identifier will further enhance the efficiency of block chain and machine learning technology and their deployments to ease access to credit. Another major issue is the judicial system. Prompt dealings and disposal of commercial cases, especially those between lenders and borrowers help the system. The judicial system should engender confidence and boost a credit economy with prompt resolutions of cases. A few initiatives have been introduced in this sphere as well, but more still need to be done.

“For SMEs, formalization and the adoption of basic governance practices will improve their access to finance generally. Simple financial record keeping, auditing of financial records, putting structures around the day-to-day running of the business can go a long way in building the confidence of financial institutions and other providers of funds in dealing with them”,  he said.

Speaking further, Popoola noted that the journey towards improved access to credit especially for consumers and SMEs has been helped with the establishment of credit bureaus, collateral registry and digitization, but said it can only get better.

According to him, the focus has to be more on policies and programmes that provoke market-driven initiatives, saying that this will only be addressing the issues constituting bottlenecks and militating against free flow of credit to consumers and SMEs.

However, the journey towards improved access to credit especially for consumers and SMEs has been helped with the establishment of credit bureaus, collateral registry and digitization. It can only get better. The situation today is different from what it used to be several years ago. Significant improvement in access to credit is being experienced.

This is even as he noted that new players are also coming into the system especially those that can be classified as shadow banks, mostly fintechs, money lenders and telcos process loans with speed. He said, this phenomenon has influenced most of the commercial banks to also change their lending model, embrace technology and build the capacity of their personnel to enable them service consumers with low value loans.

“As technology is assisting in addressing the challenge of financial inclusion, it will rub off on lending and improve access to credit for consumers and small businesses. There is no doubt that the ease of access to credit for consumers is more visible now than ever. And it can only get better.

For a better society

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