Credit Bureaus seek single unique identification for improved access

To further bridge the financing gap for more than 74 per cent of Small and Medium Enterprises (SMEs), the Credit Bureau Association of Nigeria (CBAN), has said a single unique identifier would aid improved access to credit to fund small businesses in the country.

Indeed, the Bureau emphasised the need for investment in infrastructure for Nigeria to attain financial inclusion, stressing that the present administration must prioritise developmental efforts to implement an aggressive means of identification, otherwise, not much would be achieved.

The Chairman, CBAN, Tunde Popoola, at its 5th National Credit Reporting Conference, said access to credit by Micro Small and Medium Enterprises (MSMEs), and consumers in Nigeria is still very low, stressing that despite the country’s huge population of over 190 million people, less than 15 million persons/entities have enjoyed at least one form of credit from banking institutions.

Popoola pointed out that the country has multiple forms of government issued identifiers for individuals, including National Identity Card, Bank Verification Number (BVN), Driver’s Licence, Voter’s Card, and International Passport.

He added that in most countries of the world with successful credit bureau infrastructure, there is always one single means of identification, which Nigeria has to adopt.

Meanwhile, quoting the World Bank access to credit report, he said Nigeria has moved from 37th position in 2017 to 6th in 2018, a feat he said was possible courtesy of Federal Government’s different initiatives aimed at fostering the ease of doing business.

He said the major responsibilities of credit bureaus are data collection, matching and dissemination, maintaining that the value of having a unique identifier cannot be overemphasized in performing these tasks.

He decried that currently, the identifier for corporate entities such as company registration number (RC number) is not readily provided by data furnishers.

“The current situation makes data matching very tedious, cumbersome, and expensive for the bureaus. This is because the bureau relies on identification of data subjects to be able to match and merge data, and develop innovative products for the markets. We, therefore, urge the government to speedily implement a unique identifier for every Nigerian.

“In addition, the entire bank loans to consumers at any given time in a month are less than N1trillion. To underscore the challenge of loan concentration, available data indicate that the total value of credits in the financial sector as of June 2018, corporate entities which represented about 10 per cent of the credit subjects assessed 94 per cent of the loan value. This clearly shows the very low rate of credits to MSMEs and consumers.”

According to him, the credit bureau coverage remains low in Nigeria at eight per cent compared with 64 per cent in South Africa, 25 per cent in Egypt, and 17 per cent in Ghana, and underscores the need to urgently change the narrative of credit concentration and increase access to credit.

Also, the Director, Banking Supervision Department, Central Bank of Nigeria (CBN), Ahmed Abdulahi, said both the financial and non-financial sectors have a crucial role to play to attain more financial inclusion in the country.
He noted that Nigeria’s credit bureau industry has been promoting the use of credit information to make financial decisions, to enable businesses achieve their financial goals thus promoting financial inclusion in the country.

He added that access to credit is crucial to economic growth and has continued to be the catalyst for driving private sector development.

Minister of State for Industry, Trade and Investment, Hajiya Aisha Abubakar, added that credit information would enable Nigerian businesses particularly SMEs to thrive to create jobs.

“It would also impact positively on the Nigerian citizenry by way of identity, where Nigerians can access all financial services in the country. We have put some efforts in achieving milestone in our current drive for financial inclusion and improve the Nigerian economy. It is also noteworthy that the efforts of credit information should not be restricted to financial institutions alone but also non financial institutions.

“Today it is our hope that this forum would proffer innovative ways on how data exchange or sharing to encourage more financial inclusion in Nigeria,” she added.