The Group Managing Director of CRC Credit Bureau, Dr. Tunde Popoola, has asked the Federal Government of Nigeria (FGN) to focus more on policies and programs that would address issues inhibiting free flow of credit to consumers and Micro, Small and Medium Enterprises (MSMEs) in the Nigerian economy.Dr. Popoola made the call in Lagos on Tuesday at a forum organised by the Finance and Business Online Publishers (FiBOP) Association.
He noted that government interventions alone through grants, subsidies and other special arrangements and incentives, although helpful, will not bring about the necessary incremental access to credit required to stimulate rapid economic growth and poverty alleviation in the country.
In his words, “The challenge of access to credit confronts consumers and MSMEs much more than the large enterprises. Large firms have easy access to credit. But to stimulate economic growth, reduce poverty and engender prosperity, there must be significant improvement in access to credit and other forms of finance for consumers and MSMEs.
“It is instructive to note 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. The focus must be more on policies and programs that provoke market-driven initiatives which should be addressing the issues constituting bottlenecks and militating against free flow of credit to consumers and MSMEs.”
The CRC Credit Bureau boss, however, acknowledged that there has been significant improvement in access to credit after the federal government licensed Credit Bureaus to operate in the country. “New players are also coming into the system, especially those that can be classified as shadow banks, mostly fintechs, money lenders and telcos. They process loans with speed.
“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.” Dr. Popoola said.
Commenting on the unethical practices of some micro lenders and fintechs in the country, Dr. Popoola noted that many Nigerians have been put through harrowing experiences in patronizing them. “Their rates are usurious, and their debt collection management are barbaric, evil, embarrassing, and stressful for their customers.
“We are also beginning to witness fraudulent deployment and use of Apps, leading to loss of funds, unethical lending practices and usurious charges. The Nigeria government embarked on a clampdown of some of them not long ago. But this has not stopped them.” He said.
The CRC Credit Bureau GMD called on regulators including; the Central bank of Nigeria (CBN), consumer Protection commission (CPC), and the Securities and Exchange Commission (SEC) to bring these operators under regulation and high-level scrutiny.
Comment here