‘BVN enrolment will boost credit management’

THE ongoing Bank Verification Number (BVN) project will enhance the management of credit score of banks’ customers in Nigeria, the Group Managing Director/Chief Executive Officer of Fidelity Bank Plc, Nnamdi Okonkwo, has said.
The credit score, which would be based on credit report from credit bureaus, would help lenders to determine who really qualifies for a loan, as identities provided by the exercise would be matched against the information.
Okonkwo, while speaking to journalists, also said the BVN would enhance access to credit to Small and Medium Enterprises (SMEs) as there would be concrete identities and elimination of forgery.
Already, there are about 17 million registered SMEs in Nigeria today and in some countries, SMEs account for up to 70 per cent or more of businesses.
“In more developed parts of the world, they have credit rating systems and social identification system. For example, if I am Nnamdi Okonkwo, there might be other 1,000 Nnamdi Okonkwos, but each Nnamdi Okonkwo has a unique number assigned by his country such that whenever you put that number in, everything about that person comes out. We are gradually getting to that.
“Until we get there, credit scoring system is still a challenge. Therefore, it is possible that this same Nnamdi Okonkwo can go to a bank, take a loan and default, move to another bank, still take a loan and default and nobody sees that his credit history is bad. But with what the CBN has done on the BVN project, that will be taken care of. That is why I am advising everybody to go and register and get your BVN.
“When each of us has the BVN, which is tied to our thump, if I need to lend money to you, I can easily check your background. If the person is a notorious debtor in other banks, then he doesn’t get a loan from me and that protects all of us because the bank does not own all the money. Most of the monies that banks do business with belong to depositors. So, whatever initiative the CBN is taking, it is to protect depositors and the larger economy.
“The BVN is a unique number that every account holder in Nigeria should have, going forward. So, with your thumb registered, wherever you go, you can confirm that it is you. It is for security, it is for Know Your Customer scheme. Like you know, for you to borrow from any bank now, you must have your BVN. It helps our credit scoring system.
“The compliance level has been growing. At Fidelity Bank, we first made sure every staff member was registered because you can’t sell what you don’t understand. So, when we are explaining to our customers, we can as well show them our own BVN.”